EXPLORING INSTITUTIONAL INVESTORS’ DETERMINANTS OF INVESTMENT IN AFFORDABLE HOUSING FUND

This study attempts to explore factors that may attract institutional investors to invest in affordable housing funds in Malaysia. Six traits of investments were tested, namely fund structure and mandate, market return, social return, risk mitigation, governance and transparency, and government support for the investment. Based on the six determinants, the study uses a partial least square structural equation modeling (PLS-SEM) technique using data gathered from a survey involving employees of institutional investment firms in Malaysia. The study found three significant factors motivating institutional investors to invest in affordable housing fund, namely social return, government support, and governance and transparency. Overall, it was found that institutional investors do greatly consider social elements in their investment decisions. This will potentially open new avenues in fundraising efforts to build more affordable housing, hence providing an adequate supply of these homes for those in need.