Newcore closes social infrastructure fund at £190m

Investment manager Newcore Capital has held the final close of its latest social infrastructure real estate fund with £190m in equity commitments. Newcore, which has £500m of assets under management, focuses on real estate that enables the provision of essential services to communities. Target asset classes include education and childcare, healthcare, storage, life sciences, waste management, roadside and transport. The Newcore Strategic Situations V fund will focus on properties in Greater London and the south-east of England. Investors in NSS V include the Merseyside and Clwyd local government pension schemes, alongside two European fund-of-funds managers and a FTSE 100 corporate pension fund. Several high-net-worth individuals and family offices also participated in the final close. The fund targets a net levered internal rate of return of 13-15% per annum, with leverage of up to 30% loan-to-value at a fund level. Newcore said, combined with leverage, the capital raise has given it close to £350m of firepower to deploy into the market. Newcore chief executive Hugo Llewelyn said: “To have achieved our largest final close to date against a deeply uncertain economic backdrop is a testament to the track record of our team and the quality of our proposition, which is why so many of our investors have invested with us throughout our value-add fund series. “Across traditional real estate sectors, rising interest rates are colliding with structural changes that put many assets at risk of obsolescence, forcing investors to rethink their allocations, and we expect social infrastructure to form a greater portion of institutional portfolios going forward.” Neil Sarkhel, chief operating officer at Newcore, said: “Our strategy allows institutional investors to gain exposure to hard-to-access, granular assets that are both resilient and genuinely impactful. The capital raised will enable the creation and refurbishment of space for essential social uses. “Our investment approach with Newcore Strategic Situations V will look to build on the success of previous funds while intensifying our occupier engagement to drive positive ESG outcomes.” Peter Wallach, director of pensions at Merseyside Pension Fund, said: “Our continued investments with Newcore Capital allow us to contribute to the provision of essential infrastructure and services the UK needs to support a growing and ageing population, while also contributing to the ‘greening’ of the built environment through sustainability-focused, value-add asset management initiatives.” Hans Prottey, head of private markets at Coutts, which introduced a number of high-net-worth individuals as early investors in the fund, said: “We are pleased to support Newcore’s fundraise, particularly given both Coutts and Newcore are certified B Corps. “Our clients saw this as an attractive opportunity to invest alongside a highly specialised, award-winning fund manager with a proven track record.” To send feedback, e-mail pui-guan.man@eg.co.uk or tweet @PuiGuanM or @EGPropertyNews Photo by Image Source/REX/Shutterstock