Newcore Social Infrastructure Income Fund achieves first close

Newcore Capital (Newcore), a specialist UK real estate investment manager, has achieved first close for its £375 million core-plus fund, the Newcore Social Infrastructure Income Fund (NSIIF or the fund).

The Fund has secured three notable institutions as cornerstone investors: The Parliamentary Contributory Pension Fund, a Local Government Pension Scheme and an insurance company client of Capricorn Private Investments, an outsourced investment office.

The first close provides NSIIF with £100 million of investment capacity to deploy into the current dislocated real estate market.

The objective of the Fund is to deliver sustainable long-term income and capital returns from a functional portfolio of UK real assets enabling essential social infrastructure uses, such as education, childcare, clinical healthcare, transport, and waste management. A circa £300 million pipeline of potential acquisitions has been identified across the UK.

NSIIF seeks to generate positive social and environmental outcomes by:

• Reducing under-utilised vacant spaces to meet the demands of social infrastructure, deploying a refurbish first approach and recognising embodied carbon.
• Creating new, fit for purpose social infrastructure provision on a de-risked financial basis, aligned with net zero ambitions.
• Maintaining and upgrading the fabric of social infrastructure buildings, where there could otherwise be negative impact from the restricted use or loss of that space.
• Acquiring existing functional buildings where there is an opportunity to work with the operator to increase the provision of social infrastructure space during the lease or at expiry.

NSIIF will target returns of 9%-11% per annum IRR, with a 4-5% annual dividend. The fund will be semi-open-ended with structured liquidity flows for primary redemption and new capital raising.

Hugo Llewelyn, Newcore Capital CEO, commented: “We are pleased to have achieved first close for NSIIF, securing three note-worthy institutions as cornerstone investors. This milestone has been achieved against the backdrop of a particularly difficult capital-raising market and demonstrates that a clear three-dimensional focus on sustainability – financial, environmental, and social – can deliver positive results for fund managers, by securing commitments from high quality investors with similar aspirations for their capital.”