Hugo Llewelyn

Newcore Capital, a specialist UK real estate investment manager, has achieved first close for its £375m core-plus fund, the Newcore Social Infrastructure Income 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 £100m 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 £300m 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 chief executive, said: “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.”

Newcore has delivered strong returns since inception, achieving 9.4% p.a. IRR on all assets since inception in 2011 to December 2024, using only modest financial leverage.

It currently manages £600m in assets across both its core-plus and value-add strategies, on behalf of institutional and family office clients.

These returns have been delivered while maintaining a strong emphasis on environmental and social sustainability, reflected in its status as the highest-ranking B Corp certified real assets fund manager globally.