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Why are UK insurers investing in commercial ground rents?

AlphaReal is a specialist real assets investment manager. We estimate that UK insurers have invested over £1.5 billion into Commercial Ground Rents (CGRs) over the last 18 months or so.

As a leading player in the UK CGR market, we have engaged with several market participants as interest from insurers has accelerated. This paper seeks to explore the drivers of the increased level of interest in the market and why insurers are investing in CGRs.

In this insight we will:

  1. Introduce CGRs and identify the characteristics that make this asset class attractive to insurers.
  2. Offer insight into how insurers have driven the evolution of the CGR market.
  3. Consider Matching Adjustment eligibility and regulatory capital treatment.

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