Schroder Real Estate Investment Trust Ltd · LSE:SREI
Schroder Real Estate Investment Trust — Schroder BSC Social Impact Trust — Investor Presentation (October 2023)
39 slides from Schroder Real Estate Investment Trust's investor presentation, October 2023
Slide 1: Schroders BSC Social Impact Trust
Schroders BSC Social Impact Trust Investing to address UK social challenges October 2023 Jeremy Rogers Hermina Popa Marketing material. Big Society Capital
Slide 2: Big Society Capital is a leading UK social impact investor
Big Society Capital is a leading UK social impact investor It unites capital, expertise and ideas to improve lives and provide sustainable returns Founded in 2012 with Dual role to grow the UK 30+ dedicated impact £883m committed capital £625m from UK dormant social impact investment investment reac
Slide 3: Schroder BSC Social Impact Trust is a pioneering listed vehicle
Schroder BSC Social Impact Trust is a pioneering listed vehicle It provides a unique mix of access, return and UK social impact for investors to specialist private market impact investments Access – Diversified portfolio of actively managed, high-impact investments – Co-investments, secondaries and
Slide 4: Social Impact Trust key highlights
Social Impact Trust key highlights Delivering positive financial returns and deep impact in a challenging environment Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get b
Slide 5: Poverty and inequality in the UK is an urgent social issue
Poverty and inequality in the UK is an urgent social issue There are 13.4 million people living in poverty in the UK1 Poverty gap2 Areas of UK wide deprivation3 Healthy life expectancy at birth (2018 to 2020)4 0.45 Map Key 85 0.4 Most deprived 0.36 80 0.35 Least deprived 0.3 75 0.25 70 0.2 65 0.15 6
Slide 6: Solutions to these social issues require significant investment
Solutions to these social issues require significant investment The investment gaps have only widened following the pandemic and cost of living crisis Challenge Investment gap Reducing £16.9bn per year over the next decade poverty and COVID tipped 180,000+ into homelessness to tackle housing shortag
Slide 7: The UK social impact investment market is growing
The UK social impact investment market is growing Strong market growth was led by increasing investor demand and new fund launches Market size is the outstanding value of social impact investments (i.e. the balance sheet amount) Market has grown more than 10x, from £830m in £9.4bn Market size 2011 t
Slide 8: Financial Performance and Portfolio Update
Financial Performance and Portfolio Update
Slide 9: The Schroder BSC Impact Trust invests across key themes
The Schroder BSC Impact Trust invests across 4 key themes Our aim is to address entrenched social issues across the UK Reducing poverty and Good health and Education, training A just transition to inequality wellbeing and decent work Net Zero Company NAV Company NAV Company NAV Company NAV aligned t
Slide 10: The Company supports over 160 frontline social enterprises
The Company supports over 160 frontline social enterprises These frontline organisations have, on average, a 30-year track record Reducing Poverty Good Health Education, Training, Just Transition and Inequality and Wellbeing Decent Work to Net Zero Debt and Equity for Social Enterprises High Impact
Slide 11: Financial Performance
Exposure % of NAV, 30 June 2023 Financial Performance NAV of High Impact Investments + undrawn commitments Past performance is not a guide to future performance and may not be repeated. The value of investments and the income 3% from them may go down as well as up and investors may not get back the
Slide 12: NAV Performance
NAV Performance For 12 months ending 30 June 2023 NAV per share progression Performance Drivers 108 3.21 Increased income from floating -0.71 107 -0.58 rate securities and index linked 106 -1.3 rental increases 105.39 -1.2 0.09 104.9 105 Valuation losses from Skills 104 Training UK write down 103 in
Slide 13: Dividend increased by 77%
Dividend increased by 77% Forward dividend guidance increased from 1–2% on NAV to 2–3% on NAV £3.00 3.00% Upgraded £2.50 £2.30 2.50% dividend guidance £2.00 2.00% £1.50 1.50% IPO dividend £1.30 guidance £1.08 £1.00 1.00% £0.50 0.50% £- 0.00% 30 June 2021 30 June 2022 30 June 2023 Dividend per share
Slide 14: Mature assets driving returns to date
Mature assets driving returns to date Contributing 10.7% to NAV since launch Exposure % of NAV NAV NAV NAV NAV Investment Phase Contribution Contribution Exposure Invested 30 June 2023 12m since launch Mature 65% 64% 0.2% 10.7% Fully deployed funds 3% Investment Phase 32% 24% 1.6% 1.7% Funds in ramp
Slide 15: Portfolio
Portfolio Invested % Exposure Example revenue Name Asset type Invested Exposure1 Investment focus Example social outcomes of NAV % of NAV sources Debt for Social Gov’t social care Charity Bond Portfolio £14.8m 17% £14.8m 17% Bonds issued by charities Physical and mental health Enterprise contracts D
Slide 16: Diversified access to high impact private assets
Diversified access to high impact private assets Asset allocation Vintage Phase Access Fees 3% 10% 18% 17% 16% 32% 32% 40% 41% 16% 59% 65% 47% 47% 49% High impact housing 2013-2016 Mature Co-investments/secondaries No manager fees or discounted 2017-2019 Investment Private funds closed to new Market
Slide 17: Outlook
Outlook Uncertainty for the UK economy remains in the run up to the Autumn Statement in November Largest fall in living standards since the 1950s disproportionately affects those most vulnerable in society, with continued pressures on government spending leading to cuts Historically resilient invest
Slide 18: Investment Approach and Case Studies
Investment Approach and Case Studies
Slide 19: The Social Impact Trust benefits from BSC's unique model
The Social Impact Trust benefits from BSC's unique model A decade of innovation in social impact investment drives pipeline of proven impact models Market Active Dedicated Portfolio Schroder BSC Social Development Investment Management Impact Trust Identify and track social Proven investment process
Slide 20: Targeting high quality returns and transforming lives
Targeting high quality returns and transforming lives Financial performance is driven by achieving deep, scalable and sustained impact Financial drivers and risk mitigation Impact return and risk mitigation What: Significant needs – housing, Historic revenue stability, high weighting health, social
Slide 21: Providing affordable social accommodation for elderly people
Providing affordable social accommodation for elderly people Social lending – Uxbridge United Welfare Trust Independent living Charity Bank Co- £6.43m for elderly people 20 affordable investment co-investment apartments Helps address the portfolio (Company: £1.75m) housing crisis Financial drivers a
Slide 22: Affordable housing for rent and purchase in Milton Keynes
Affordable housing for rent and purchase in Milton Keynes High impact housing – Towergate, Man Community Housing Fund 55 two- and three- Housing for key- Man Community £235m fund size bedroom homes for workers in areas of Housing Fund (Company: £10.0m) shared ownership low affordability Financial dr
Slide 23: Outcomes contract providing support for unpaid carers
Outcomes contract providing support for unpaid carers Social Outcome Contracts – Norfolk Carers Partnership, Bridges Social Outcomes Fund II LP Support unpaid 10,000 carers to be Bridges SOF II £35m fund size carers and relieve supported in portfolio (Company: £8.3m) pressure on the Norfolk care sys
Slide 24: How the Company achieves positive social impact
How the Company achieves positive social impact Our second Impact Report was published June 2023 Impact data for portfolio companies does not attribute a share of impact results to the Company’s investment. Source: Data is taken from the latest available fund manager impact reports submitted to the
Slide 25: Conclusion
sok Gry Schroders CAP TAL
Slide 26: Investing to address UK social challenges
Investing to address UK social challenges High quality returns and the highest level of impact intentionality Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the
Slide 27: Appendix
sok Gry Schroders CAP TAL Appendix
Slide 28: Proven models funded by public spending already exist
Proven models funded by public spending already exist However, these models do not have enough private capital investment Public spending Investment solution Reducing Private capital into proven models poverty and Annual housing benefit costs are £24bn providing high quality social and inequalities
Slide 29: The Company invests across three core impact asset classes
The Company invests across three core impact asset classes Each are lowly correlated with each other and to traditional financial and public markets Debt and Equity for High Impact Housing Social Outcome Contracts Social Enterprises Loans and equity to large, well- Secure and affordable homes for Ca
Slide 30: Seeking inflation resilient returns
Seeking inflation resilient returns 66% of invested capital aims to benefit from higher rates of inflation Exposure¹ as a % of NAV Invested as % of NAV 1% 3% 34% 35% 40% 41% 7% 10% 14% 14% Housing and Renewables – mix of longer dated index linked leases, shorter property leases, Feed in Tariffs etc.
Slide 31: Liquidity Asset Allocation
Liquidity Asset Allocation Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Invested to mitigate cash drag during investment perio
Slide 32: Financial Returns
Financial Returns Total returns for 12 months ending 30 June 2023 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. 30 June 2023 30
Slide 33: Social and Affordable Housing Update
Social and Affordable Housing Update Differentiated approach has proven highly resilient despite problems in the listed REIT sector Housing portfolio recorded 100% collection of rent due by end June Our managers target organisations with local expertise, proven track record, strong balance sheets an
Slide 34: Deep resources, proven impact and investment expertise
Deep resources, proven impact and investment expertise Dedicated Schroder BSC Social Impact Trust Portfolio Management Team Experienced Schroders’ Oversight Hermina Popa Jeremy Rogers Anna Shiel Stephen Muers Keith Starling Philip Essl Lyn Tomlinson Andrew Howard Paul Lamacraft Managing Co-Chief Co-
Slide 35: Schroder BSC Social Impact Trust Board
Schroder BSC Social Impact Trust Board Independent Board of Directors Susannah Nicklin Michael Balfour James Broderick Alice Chapple Chair NED and Chair of Audit Committee NED NED – Non Executive Director (NED) and – NED, Chair of Audit, Renumeration – Director, Impact Investing Institute – Independ
Slide 36: Performance definitions
Performance definitions Definitions Commitment (£m) Total commitment to the investment Value (£m) Current value of the drawn portion of the investment Exposure (£m) NAV of High Impact Portfolio plus undrawn commitments Distributions to date (£m) Capital and income distributions since investment Draw
Slide 37: Key risks that are specific to the Company
Key risks that are specific to the Company – There can be no guarantee that the Company will achieve its investment objective or that investors will get back the amount of their original investment – The Company has a limited operating history and investors have a limited basis on which to evaluate
Slide 38: Conflicts of interest disclosures
Conflicts of interest disclosures Potential conflicts of interest: 1. The Company may make social impact investments alongside Big Society Capital (BSC) and/or in which BSC has a direct interest or an indirect interest via investments in intermediary organisations who in turn invest into charities a
Slide 39: Important information
Important information This presentation has been prepared by Schroder Unit Trusts Limited ('Schroders'), which is authorised and regulated by the United Kingdom Financial Conduct Authority, for information and discussion purposes only. The information in this presentation has not been fully verified
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