[Music]
I'd like to start by taking you back to
2008 the year after global financial
crisis
to put it in context this was the year
the AppStore was invented and Instagram
was yet to be bought
I could be found in the land economy
library at the University of Cambridge
at an ugly desktop computer needs deep
in what has become a lifelong
fascination with real estate and
economics how society uses its scarce
resources I was captivated by how these
elegant theories translated into the
complex reality that I saw around me
especially in the property market I
realized that the way that capital was
allocated had financial and social
consequences and what's more the two
were interdependent so social trends
affected profit potential and profit
potential had social consequences this
idea has influenced my career since then
as a property investor and strategist
I've had the privilege to be involved
with hundreds of millions of pounds
worth of deals or strategies now most
recently as co-founder of the property
fund angler residential which focuses on
rental housing like quite a less
investing on a larger scale as I made
there shipped from idealistic and
enthusiastic student to more
commercially minded investor and
business owner I began to notice some
common themes which seem to apply to
investors of any scale and they continue
to apply today firstly the investors who
see the greatest success those who start
with the right strategy they don't jump
in or make emotional decisions they
start with a really clear and got and
then they map out a logical path to it
taking into account what's happening
locally and nationally and how that
affects them secondly investors who want
that panacea of strong returns and
low-risk focus on investment strategies
that deliver value by solving problems
for their customers in the context of
the rental property those customers are
basically all of us anyone who lives in
a property whether we're tenants or
areas so in the context of residential
property the customers are all of us
tenants and homemakers I saw the
importance of strategy and
problem-solving as a way to add value as
a strategy consultant at Deloitte where
I worked for major global banks and
private equity firms working with high
net worth investors on individual
investment projects and researching and
writing my book strategic property
investing which enabled me to get to the
heart of what so many investors really
want just a way to make profit safely
and how to get it by showing their
customers problems so what are the
problems that need solving in the
residential property market well firstly
there's problems facing investors you
allocate capital and investors problems
are really important because real estate
requires
it's capable of generating a lot of
money whether we're talking about young
savers or the most powerful pension
funds in the world
most investors want the same thing they
just want to put their money in and be
confident that they're going to get more
money out and they also increasingly
care about having a positive impact on
the world the reasons of wanting to do
good wanting to be known for doing good
or simply not wanting to be known for
doing bad and this reflects the
importance of good PR in this
fast-moving digital age and it also
reflects the growing body of thought and
activity seeking positive meaning and
identity business must increasingly be
conducted in a way that is both
profitable and socially responsible the
second set of problems is those facing
customers who in theory benefit from
capital that is allocated on a micro
level many individuals and families are
really struggling due to a shortage of
housing that is affordable quality and
located in the places they want a need
to live on a macro or economy-wide level
this struggle has come to be known as
the housing crisis is said to affect 8.4
million people in England who are living
in unaffordable insecure or unsuitable
homes there's about two hundred and
eighty thousand people in England who
are currently homeless this is vividly
illustrated by those we see living on
our streets who lack the basic human
right of shelter but it's not just about
people sleeping right off the shortage
at the right kind of housing in the
right locations at the right prices
increases this gap between the haves and
the have-nots within and between
generations and disproportionately
affects younger and poorer people the
housing crisis isn't just a housing
problem it's an economic social and
increasingly political problem so let's
assume we want to solve it if only it
was as simple as throwing money at the
problem or building more houses finding
solutions is complicated due to market
imperfections for example information
asymmetries which mean that often one
party knows far more than another in
consistencies housing is not uniform in
location quality or price and
interdependencies which means that the
housing market affects and is affected
by financial markets regulations social
trends and so on it's not an isolated
problem different schools of thought see
different potential solutions
free-market capitalist suggests just
leaving the situation to market forces
however relying on profit motives to
solve this long-term problem it's
probably not the answer the US housing
market illustrates how relying on a more
capitalist approach can increase
inequalities and exaggerate human bust
outcomes so what if the government could
intervene to solve the crisis
well attempts have cost billions of
pounds worth of taxpayers money and
proved relatively unsuccessful this is
partly because policy ideas that solve a
politician's problem of winning votes
are often not the policies that will
solve our long-term complex
socio-economic
and headline-grabbing policies are the
worst offenders for example help to buy
was designed to increase the
availability and affordability of
housing for aspiring homemakers and in
practice it's proved to be expensive
it's mostly helped people who didn't
need the support and it's encouraged
house price rises meaning that housing
is less affordable overall nonprofit
organizations and charities can
alleviate problems at the margin for
example providing temporary shelter for
vulnerable people but they don't have
the scale or resourcing needed to solve
a market wide problem so since these try
and tested approaches have not worked
yet and the housing crisis is a growing
problem perhaps now is the time to
explore the possibility that a new way
of thinking and doing could help so what
about socially responsible investment
this is a strategy designed to deliver
positive social and financial outcomes
it's not about sacrificing profits in
favour of doing good it's about focusing
on financially relevant positive social
goals they can be measured through
environmental social and governance or
ESG metrics rather than just focusing on
short-term profit maximization it seems
like a great idea in theory for
investors it's compelling socially
responsible investing is said to improve
rewards relative to risk and it's no
surprise then that ESG investment
amounts to 30 trillion dollars in assets
under management around a quarter of all
professionally managed assets today for
society it also seems to make sense
surely it can improve the cost quality
and availability of housing but for
socially responsible investment to help
resolve the housing crisis we'll need
public and private sector to work
together what's more we need to be
realistic this problem has evolved over
many years and it won't be resolved
overnight secondly we need clear
environmental social and governance
priorities because this will affect what
we do next and how successful it is for
one of the most frequently discussed
solutions to the crisis is building more
houses this is hugely problematic
because it means D prioritizing the
environment and what's more many new
build lots of flats are built for sale
and their premium they didn't really
help the people who they are meant the
kind of socially responsible property
investment that would also tick the ESG
box is likely to be far less sexy and
much longer term it's likely to involve
things like investing in existing rental
housing and associated infrastructure
rather than building fancy new blocks of
flats with it and this will take some
getting used to because the mass and the
investment story are very different
thirdly we need to improve our
understanding and reported there's
thousands of ESG analysts at major
global financial institutions and yet
there's relatively little best practice
in or attention on socially responsible
property investment we need some
credible reliable consistent ways that
we can understand sustainability and
then we need to include this in how we
rate value and analyze investment
opportunities so that we can actually
make the right decisions finally we need
to put some time money and effort into
creating socially responsible property
investment product so that sideline
savers through to large funds can
actually invest in this way I mentioned
earlier how I believe that the best
investment strategies are focused on
solving problems and perhaps the most
pressing problem in the UK property
market is what has come to be known as
the housing crisis it seems to me that
the best possible approach to solving
the crisis lies at the intersection of
safe profits for investors and positive
social outcomes for society socially
responsible property investment has the
potential to deliver financial returns
for investors and reduced inequalities
of opportunity in line with the UN
sustainable development goal of reduced
inequalities we have a huge opportunity
for property to catch up with other
investment sectors we need to make this
a priority and going forward the
investments that we make as a business
and as a generation need to be able to
deliver both financial and social
outcomes if public and private sector
work together then we have a reason to
feel more optimistic than ever about our
chances of solving the housing crisis in
a way that is both commercially viable
and sustain it thank you
[Applause]