UK - M&G will launch its social housing investment fund by the end of the year, the asset manager says.
M&G said it is in the process of putting a fund together that will pool pension fund money and distribute loans to housing associations.
It said the fund will aim to raise about a nineteenth or twentieth of the current £20bn ($32bn) shortfall in social housing. It will provide investors with an inflation-linked cash flow for 20 to 40 years and give investors the security of owning the underlying properties.
A spokesman for M&G said: "We are getting to the business end of conversations with pension funds. We are confident we will be in a position to put a fund together by the end of this year."
The fund is expected to be managed by M&G fixed income director William Nicoll.
M&G said the decision was driven by the expectation that housing associations will return to large savings institutions - such as fund managers and insurance companies - to lend them money.
Historically, large banks lent money to housing associations after flooding the market with cheap credit in 1987, however the credit crunch led to bank finance drying up and banks remain reluctant to lend.
In last month's Spending Review the government announced a £4bn cut in capital expenditure for social housing. Experts predicted this shortfall would provide opportunities for institutional investors.
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