UK-based investment manager Newcore Capital has raised £190m for its fifth social infrastructure real estate fund Newcore Strategic Situations V (NSS V).
The fund will focus on investing in UK social infrastructure assets such as education healthcare, storage, life sciences, waste management and transport, with a primary emphasis on Greater London and the South East of England.
It is the largest ever capital raise for the firm and combined with appropriate leverage it gives Newcore close to £350m of firepower to deploy into the market.
Investors in NSS V include the Merseyside and Clwyd Local Government Pension Schemes, two European fund-of-fund managers and a FTSE 100 corporate pension fund. A number of high net worth individuals and family offices also participated in the final close, some of whom were introduced by Coutts via its investment club.
NSS V is a close-ended vehicle with a life spanning over seven years and the fund’s target net levered internal rate of return (IRR) is 13-15% per annum with sustainable leverage up to 30% LTV at a fund level.
Hugo Llewelyn, CEO of Newcore Capital (pictured), 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 Capital, added: “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, added: “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. We look forward to following Newcore’s achievements over the next few years.”
