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Investing in Innovative Zero Waste Construction

2 August 2023

Numbered timber joists numbered laying horizontally

Team stood outside Top Hat factory infront of Top Hat Logo, with strong risk adjusted returns and positive impact goals in green box

One of our affordable housing managers, Man Group, have partnered with TopHat to deliver 226 affordable modular homes at a site in East Sussex, all of which will be operationally net zero (WPF share approx. £7m).  Recently we had the exciting opportunity to visit this site.  The purpose of our visit to Derby and Tophat's 125,000 sq ft factory, was to explore and understand how sustainable practices can be embedded into the construction of affordable homes.

What is modular housing?

Modular housing, or factory-built housing, is a construction method that involves building sections or modules of a home in a factory setting and then transporting and assembling them on-site. Unlike traditional construction, where homes are built entirely on-site, modular housing offers a more efficient and streamlined process. Essentially, 'flat-pack' housing that comes together like Lego! 

During our factory tour, we went on a journey from the raw materials, to seeing the walls, rooms, and modules coming together to form the finished product.  Each step of the process gave us the opportunity to enquire about methods and materials, and understand the environmental implications.

Innovative materials

Modules are clad using proprietary 3D printed bricks, which require less heat during production and offer colour-matching capabilities.

Rigidur, a recycled cellulose material which is both fire resistant and strong, is used for the walls in the modules.  It arrives on site in panels which are 2.5m tall - the exact height of the rooms, meaning no offcuts - an example of waste being eliminated through design.

3 pictures; numbered timber joists, brick cladding and wall of pipework for plumbing

Examples of sustainable practices and efficiency

  • Timber is sustainably sourced, and like-for-like trees are planted in the same location where trees were harvested, maintaining the ecological balance.
  • Machines measure the timber and calculate the most efficient cuts, printing each piece with where it fits into the assembly, like a massive 3D jigsaw puzzle!
  • 100% of the electricity used in the factory comes from renewable sources. The factory is zero waste.
  •  Due to the weight load of the modules being significantly lower than traditional homes, less concrete is required for foundations compared to traditional construction.


3 pictures; timber walls stacked vertically, walls cladded looking between units, timber horizontally being cut with a automatic cutting machine

Red square with book icon,quality education
 Investing in People and Social Responsibility

Always keen to consider social issues alongside environmental, we asked about the workforce.  TopHat recognise the need for a more inclusive industry and have achieved an impressive 21% female representation (industry average 9%). Through their TopHat Academy, they support employees in their personal and professional development, fostering a diverse and supportive environment - this demonstrates UN sustainable development goal 4, ensuring inclusive and quality education.

Orange square with industry, innovation and infrastructure
  Who are Top Hat

TopHat is a start-up, having spent significant amounts of capital on research and development, and needs to scale up in order to become profitable.  There are plans to open a second factory with vastly increased capacity.  While these plans are exciting, we were very keen to ensure that our investment would be protected during this risky phase of the company's life cycle.  Through our investment in Man Group's fund, we have exposure to multiple housing developers, as well as protection through staged payment terms.  We were able to learn more about the financing of the new factory and prospects for expansion within the housing market.  This particular risk is one we will continue to monitor.

Our visit to TopHat's modular construction site provided valuable insights into the innovative approaches being taken in the affordable housing sector, and we are proud that through our affordable housing portfolio, we are supporting this innovation. By embracing modern methods of construction and prioritising sustainability, inclusivity, and efficiency, TopHat is playing a crucial role in addressing the pressing challenges faced by the housing industry, contributing to better outcomes for both people and the planet.


5 boxes, 9-11% returns, 226 homes in East Sussex, operationally net zero, zero waste construction, innovative materials

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