Man Group’s Shamez Alibhai on the shift to direct development

Man Community Housing Fund has around 1,500 homes completed or under construction in its portfolio, and Mr Alibhai says it would like to double this over the next 12 to 18 months if market conditions allow. However, investment will be governed by the strength of individual opportunities rather than growth for its own sake.

The group will continue to invest across social rent, affordable rent, shared ownership and mid-market rental housing for key workers.

“We are investors, so there’s times where we want to invest in the market and there’s times where we don’t think it’s the right time,” Mr Alibhai says.

“Going into 2026, we think there’s some really good tailwinds around the investment market. And so we’d like to deploy capital at the ambitious rate we talked about, but that’s always subject to having the right investment opportunities. We have a responsibility to our investors to make sure that we’re stewards of their capital.”

He says the investment environment has some momentum behind it. However, he adds: “The Budget is likely to put pressure on smaller landlords and reduce rental supply. And with migration slowing, we expect rental growth overall to be more subdued.” 

Private landlords were hit with a 2% hike on rental income in the Autumn Budget, sparking fears that small-time landlords might sell off their homes. Meanwhile, net migration to the UK fell to 204,000 in the year to June 2025, down from a peak of 944,000 in 2022-23, according to the Office for National Statistics.

“We’d like to deploy capital at the ambitious rate we talked about, but that’s always subject to having the right investment opportunities”

Man Community Housing Fund has a number of investors, including a range of UK local government pension schemes, Homes England, Better Society Capital and the Church of England. Man Group declined to put a figure on the amount of money the fund has under management, but a factsheet by Better Society Capital puts it at £400m.

Historically, Man Group and its registered for-profit provider, Habitare Homes, largely operated through forward funding arrangements and partnerships with major house builders and housing associations, acquiring homes once planning consent had been secured. But with planning reforms underway, Mr Alibhai believes the time is right to move earlier in the development process.

“If you arrive late, you take what the market gives you,” he says. “If you enter at land stage, you shape tenure mix, density, quality and affordability from the outset.”

The attraction is not just improved returns, but greater control over design quality and placemaking. Mr Alibhai says Man Group aims to ensure its affordable homes exceed minimum standards on space and daylighting, increase greenery and reduce hard landscaping. Environmental performance and liveability will be central to a scheme’s design, with homes all built to Energy Performance Certificate Band A. 

“Good design doesn’t have to be more expensive,” Mr Alibhai states.

He points to Poundbury, the Duchy of Cornwall development on the outskirts of Dorchester, as a good model of thoughtful placemaking. The high-quality scheme carried an 18% cost premium but delivered a 55% premium in gross development value, according to Knight Frank.

Social infrastructure is also becoming more central to Man Group’s approach. Beyond delivering homes, the Community Housing Fund team wants to embed community facilities and services within new developments, including spaces for after-school activities, libraries and social centres.

“Community housing isn’t just bricks and mortar,” Mr Alibhai says. “Local authorities no longer have the capacity they once did. If developments don’t include community provision, places fail socially.”

Investing where the system has failed

Something else that makes Man Group’s strategy differ from those of many other investors is its approach to Section 106. While the organisation acquires affordable homes delivered by house builders through these planning agreements, it also requires additional market homes to be transferred to an affordable tenure using Homes England funding, expanding the overall affordable stock.

“We’re not just taking the homes built to satisfy [Section] 106 agreements,” Mr Alibhai explains. “We look for ways to grow the number of affordable homes within each scheme, usually through Homes England grant funding.”

This is a great way to create more affordable homes than a house builder has originally provided for, and the prospectus for the government’s new Social and Affordable Homes Programme includes a section on using grant to turn homes built for market sale into affordable housing.

“If you enter at land stage, you shape tenure mix, density, quality and affordability from the outset”

Man Group does not manage its housing directly; instead it works with operating partners, including property management firm Touchstone.

Geographically, Man Group’s focus is tightly defined. The company targets a broad corridor stretching from Nottingham to Brighton and Bristol to Ashford – areas where affordability pressure is most acute.

“These are economically productive places,” Mr Alibhai says. “But housing costs have completely outstripped earnings.”

The Oxford-Cambridge arc, the M4 corridor and counties surrounding London form the backbone of the strategy. While London remains an important investment market, it plays a more limited role for Man Group due to its predominance of high-density, multi-family blocks of flats.

Man Group focuses on low-rise, single-family housing such as semi-detached single-storey homes and three to four-storey blocks, which is in huge demand and a less risky type of development than high-rise multi-family homes. Recent additional regulations and safety processes have added to cost and complications, which has rendered high-rise building unviable for some developers.

“We’re very focused on single-family housing and that type of product isn’t very suitable to London because of the need to build at higher density because of the price of land,” Mr Alibhai says.

Lessons from modular

Man Group is unlikely to build or partner on offsite modular housing in the future, Mr Alibhai says. This follows its involvement with modular house builder TopHat. The two organisations partnered on large-scale deals to build zero-carbon modular homes, notably a £50m agreement for 226 homes in Lewes, East Sussex.

The partnership harnessed TopHat’s factory-built methods, but the modular homes manufacturer came into financial difficulties and ceased trading in 2024. However, Mr Alibhai is keen to stress that modular technology itself was not the issue.

“Offsite manufacturing works across Europe,” he says. “The challenge here [in the UK] is that planning delays erode certainty and disrupt cash flow. Factories need continuity, and planning doesn’t provide it.”

He expects modern methods of construction to continue to evolve, particularly panelised systems, but he believes these are more likely to be delivered by major house builders than specialist modular firms, which may lack the resilience to absorb volatility.

Reform still needed

While he welcomes recent planning reform, Mr Alibhai says the housing sector still faces structural barriers to delivery. Output continues to run well below requirement.

“We’re building around 140,000 homes a year, when the country needs over 300,000,” he says.

He argues that the government must go further to cut through bureaucracy, streamline decision-making and properly resource planning departments.

“Every scheme gets slowed down by overlapping guidance, legacy rules and capacity issues,” he says. “Ministers need to remove barriers not just at policy level but in real terms, scheme by scheme.”

He also highlights inconsistencies in grant funding, particularly in areas where land values approach London levels, but Homes England grant rates remain significantly lower, often rendering schemes unviable.

“If developments don’t include community provision, places fail socially”

Despite these challenges, Mr Alibhai believes the UK is at a turning point when it comes to international investment in housing, with interest from North America in particular, but warns that the quality of that capital will matter.

“We’re very focused on impact capital,” he says. “That means being socially and environmentally responsible as well as financially responsible.”

He warns against repeating the mistakes seen in other infrastructure sectors, where investment delivered short-term returns but a limited long-term legacy. An infamous recent example is Macquarie, the Australian investment bank that headed a consortium that owned Thames Water from 2006 to 2017. Some politicians and analysts argue this set the water company on course for financial collapse after it was loaded with debt.

“We’ve seen what happened with water and rail,” Mr Alibhai says. “International capital came in, but didn’t always leave behind something communities could be proud of.”

If global investors are to play a central role in solving the housing crisis, he believes the industry must hold itself to a higher standard.

“If we’re attracting international capital, we have to make sure it leaves a positive legacy,” Mr Alibhai says. “One that strengthens communities, not just balance sheets.”