A question we often get at Unison is "where do you get your funds?" People want to have confidence our investment in their home is coming from someone focused on the long-term.
At a fundamental level, Unison connects homeowners and homebuyers with institutional investors, and allows them to solve each other's needs. On one hand, Unison helps homebuyers, who have never faced a more challenging time to buy a home, and homeowners who want to access money trapped in their house for their children’s educations, their retirement needs, healthcare and renovations. On the other hand, Unison helps institutional investors access an asset which is closely aligned to their long-term objectives: diversified residential real estate.
Housing is the largest asset class in the world, nearly 1/5th of the economy and the largest component of inflation. Based on these characteristics, it deserves a core role within long-term investment portfolios as a hedge against inflation and a way to capture the benefits of economic growth.
However, housing has historically been inefficient for institutional investors to access. As any would-be landlord knows, buying individual homes, managing them, finding tenants, maintaining properties, etc. is costly, time consuming and nearly impossible to do in a truly diversified way. By co-investing with homeowners and homebuyers, Unison allows investors to overcome these costs and inefficiencies.
So, who are these investors? They are organizations who invest for the long-term, and who help everyday people. Pension funds and university endowments are two key examples for Unison.
Pension funds provide for ordinary people (such as teachers and healthcare workers) in their retirement, and help them live their golden years as they want to. A pension fund’s success is measured by whether it keeps the promise it owes retirees in the decades (not just individual years), ahead. Housing is one of the largest costs retirees face and a core way for pension funds to preserve the real (inflation-adjusted) value of money set aside to pay pensions.
University endowments have a long-term (often considered "infinite") time horizon. Endowments exist to help pay for the operating cost of a university, fund new facilities and provide for ground-breaking research in perpetuity. To meet these needs, they must preserve the inflation-adjusted value of their investments over the very long-term. A diversified investment in housing to closely aligned with this goal.