ESG & Impact Report 2022-2023 published

category

Article, News

date

July 26, 2023

Newcore Capital’s latest Impact Report shows ESG-grounded investment strategy delivers ‘consistently strong returns and social value’

B Corp certified real estate fund manager finds that three-quarters of the firm’s assets in Funds NSS V and NSS IV generate positive outcomes for people and the planet.

Newcore has simultaneously delivered strong returns to investors – 15.3%+ p.a. aggregate IRR on AUM since inception.

“Overall, the Fund turns vacant, derelict, or economically unproductive assets into economically and socially productive real estate”, said The Good Economy, social impact advisory firm.

Read the ESG & Impact Report for 2022 / 2023

Newcore Capital (‘Newcore’), the UK-focused social infrastructure real estate investment manager, has published its latest 2022-2023 ESG and Impact Report, which measures the environmental and social impact of its investments over the last year.

Newcore has worked with social impact advisory firm The Good Economy to establish an impact measurement and management framework and written two reports for Newcore Strategic Situations IV (‘NSS IV’) and Newcore Strategic Situations V (‘NSS V’) funds.

The funds’ reports review and highlight the considerable social impact produced by Newcore’s funds. For its NSS V fund, the report finds that three-quarters of the portfolio significantly improved social utility, generating positive outcomes for people and places. It also revealed the substantial impact derived through the firm’s strategy to redevelop derelict or disused sites into socially productive assets; it actively increased the social utility of two-thirds of its assets. Newcore’s contribution to creating impact was deemed medium or high for 72% of the fund. “Overall, the Fund turns vacant, derelict, or economically unproductive assets into economically and socially productive real estate”, The Good Economy said in its NSS IV report.

There is a similar story for NSS IV, where the Fund actively increased the social utility of two-thirds of its assets, with 68% of the fund having a medium or high contribution to impact. Overall, 72% of the fund generates positive outcomes for people and planet.

Across both funds, Newcore has overseen the creation of 3,570 school places, 2,604 of which are children’s nursery places and 326 of which are special educational needs school places.

It also simultaneously achieved its largest ever capital raise of £190 million in Q1 2023 despite a highly challenging macro-economic environment, showing that its sustainable investment strategy pays dividends. Over its history, Newcore has delivered strong returns to investors – 15.3%+ p.a. aggregate IRR on AUM since inception with modest financial leverage to ensure that balance sheets remain sustainable and stable through market cycles.

Other significant environmental and governance achievements include:

Asset level energy data for 95% of assets across NSS IV and NSS V.
Introduction of a tenant engagement programme to align sustainability goals and accelerate environmental improvements
“Many partners interviewed describe the Fund (NSS V) as an investor of choice and they are keen to work more closely with it.” The Good Economy, NSS V Impact Report
Progress on our commitment to bring nature closer to people and identified key areas for us to focus this year.
Newcore’s management platform being operationally carbon neutral for emission scopes 1, 2, and 3
Donating at least 10% of Newcore profits per annum to charities supporting social and environmental causes such as The Aldridge Foundation and The Rivers Trust.
Being under the UK HMRC tax regime both for management platform and funds (‘on-shoring’)
Signing up to the UN Principles of Responsible Investment, following their six key principles and filing regular reports and disclosures on progress.
Being the first B Corporation certified dedicated UK real estate investment manager, with the aim to improve the business’s score (currently 38% above the national average).

Newcore Capital Director of Sustainability, Kate Sandle, said: “Our focus on creating and managing sustainable – in all senses of the word – investments has paid dividends, putting us in a strong position for the future.

“Embedding ESG and measuring our impact contributed to us raising capital amidst challenging macro-economic circumstances, delivering consistently strong returns for investors while also generating positive social impact. That said, we recognise more can always be done and we are committed to increasing the supply of social infrastructure and accelerating action to address the climate and biodiversity crisis.”

Newcore Capital announces £190 million final close for fifth UK social infrastructure real estate fund

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Article, News

date

May 31, 2023

Newcore Capital achieves the investment manager’s largest-ever capital raise amid challenging macro-economic circumstances

Limited Partners in Newcore Strategic Situations V include Merseyside and Clwyd Local Government Pension Schemes alongside fund of fund, insurance and corporate pension schemes, family offices and high-net-worth individuals

NSS V will invest in UK social infrastructure assets, including education, healthcare, storage, life sciences, waste management and transport

LONDON, 24 MAY – Newcore Capital (‘Newcore’) has secured £190 million in equity commitments for Newcore Strategic Situations V (NSS V), which will invest in physical social infrastructure across the UK with a principal focus on Greater London and the South-East of England.

Combined with appropriate leverage, the capital raise gives Newcore close to £350 million of firepower to deploy into the current dislocated market.

Notable investors 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. The fund had a 60 percent re-up rate, with those re-upping increasing their average commitment by 74 percent. Accord Europe Limited and its affiliates were the appointed placement agent.

NSS V, a close-ended vehicle with a life spanning over seven years, is the latest in Newcore’s flagship value-add fund series. The UK-focused investment manager also manages core/core-plus separate accounts on behalf of two private family offices.

The fund’s target net levered internal rate of return (IRR) is 13-15 percent per annum (p.a.) with sustainable leverage up to 30 percent loan-to-value at a fund level. Newcore has achieved a 14 percent-plus p.a. aggregate IRR since its inception in 2011 with modest financial leverage.

Newcore currently manages £500 million in assets across both its core-plus and value-add strategies. The investment manager focuses exclusively 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.

As the UK’s first dedicated real estate investment manager to achieve B Corporation status, Newcore has a strong focus on ESG (Environmental, Social, and Governance). Newcore donates at least 10% of its profits to its Newcore Foundation and has contributed close to £500,000 to charitable causes since its establishment in 2011.

Newcore Capital CEO Hugo Llewelyn commented: “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.”

Early investors in the fund include a number of high-net-worth individuals introduced by Coutts, via its investment club. The Coutts Investment Club connects some of the bank’s most financially sophisticated, high net worth clients with private investment opportunities, both direct private companies but also thematic private equity and real estate funds.

Hans Prottey, Head of Private Markets at Coutts 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. We look forward to following Newcore’s achievements over the next few years.”

Newcore shortlisted for Property Fund Manager of the Year Award 2023

category

Article, Awards

date

April 4, 2023

Newcore Capital, the B Corporation-certified, social infrastructure investment manager, is delighted to announce that it has been shortlisted for the Property Fund Manager of the Year award at this year’s UK Property Industry Awards. The winner will be announced on the 13th of June 2023.

The Property Awards, in its 28^th year, is the property industry’s largest awards ceremony, recognising and rewarding the very best companies, teams and individuals.

Newcore has been shortlisted along with nine other fund managers and the nominees include:

AXA IM Alts
Blackstone
Legal & General Investment Management (Real Assets)
M7 Real Estate
Newcore Capital
Resonance
Savills Investment Management
Student Homes Management
Valor Real Estate Partners
Wesleyan

Newcore Capital acquires £20 million of educational assets for UK social infrastructure fund

category

Article, Report

date

October 20, 2022

Newcore Capital Management, the UK social infrastructure real estate investment manager, has acquired a further £20 million of educational assets for Newcore Strategic Situations V LP, its new £300 million value-add, social infrastructure fund.

The acquisition of the seven assets increases the fund’s investments to £43 million. It remains active in the market for educational properties as well as other social infrastructure assets, including healthcare, veterinary, waste, energy and open storage.

The seven assets, all located in Greater London and the southeast, include five early-years education settings now leased to operating partners: Family First in Guildford, Marlow and Finchampstead, Banana Moon in Tunbridge Wells and Fennies in Gerrards Cross. In addition, two special educational needs schools have been acquired: a primary school now leased to Outcomes First Group in Guildford and a school leased to an undisclosed tenant in Walton-on-Thames.

Harry Savory, chief investment officer of Newcore, said: “These seven investments provide good opportunities for our value-add strategy and for extending relationships with excellent operators of educational businesses. We are actively in the market to invest in further assets in the social infrastructure sector”.

Newcore announced the soft first close of Newcore Strategic Situations V LP (NSS V LP) in March, with an initial £60 million of investment firepower and expects a further single closing of the Fund at year end 2020. NSS V LP will shadow Article 9 of the EU Sustainable Finance Disclosure Regulation (SFDR), the highest green rating of positive impact that an alternative investment fund manager can achieve. This accords with Newcore’s strategy of delivering additional and much-needed essential services real estate to the UK market, while mitigating carbon dioxide emissions and utilities waste, within its B Corporation governance framework.

Newcore wins Property Fund Manager of the Year Award 2021

category

Article, Awards

date

August 25, 2022

Newcore Capital Management, the B Corporation-certified, social infrastructure investment manager, is delighted to announce that it won the coveted Property Fund Manager of the Year award at this year’s UK Property Industry Awards.

Newcore’s COO, Neil Sarkhel and its CIO, Harry Savory were presented with the award, which was sponsored by Yardi, at the InterContinental London, The O2, on 12 November 2021. The Property Awards, in its 26^th year, is the property industry’s largest awards ceremony, recognising and rewarding the very best companies, teams and individuals.

Newcore was chosen by a panel of judges from a shortlist of nine other fund managers, which included Hines, Legal & General Investment Management Real Assets, Patron Capital and M7 Real Estate, for its performance and quality of its work in 2020/21, which included:

succeeding at first attempt to become a B Corporation, the first dedicated UK real estate investment manager to become accredited by this external ethical business movement
strong and sustainable continuing financial performance of its funds over the year which allowed Newcore to raise substantial new discretionary capital
demonstrating a clear and measurable ESG strategy, particularly in relation to social impact – for example through its partnership with LandAid and the wider industry to create the Probono Programme.

Hugo Llewelyn, CEO of Newcore, said: “We are absolutely delighted to have won the 2021 Property Fund Manager of the Year Award at this year’s UK industry awards. Since Newcore began, a decade ago, we have tried hard to create a credible platform and positive business culture through which to deliver sustainable and attractive returns for our clients, balancing the objectives of all stakeholders in our business. This award recognises our progress to date and we look forward to building on this further over the decades to come”.

Newcore Capital hires Kate Sandle as Director of Sustainability

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Article

date

July 26, 2022

Newcore Capital, the UK real estate investment manager specialising in social infrastructure, has hired climate and sustainability expert, Kate Sandle into its senior management team as Director of Sustainability. Newcore is a Certified B Corp and invests in assets that are essentially to society.

Before joining Newcore, Kate worked for more than six years at B Lab, the non-profit network responsible for rolling out the B Corporation movement in the UK, latterly as director of programmes and engagement. In 2020, Newcore became the first dedicated UK social infrastructure or real estate investment manager to certify as a B Corporation.

Reporting to chief operating officer, Neil Sarkhel, Kate will focus on helping Newcore manage and build on its ESG credentials, including:

Co-ordinating the sustainable approach of its latest fund (Newcore Strategic Situations V LP) which aims to deliver significant positive social impact as well as attractive risk-adjusted financial returns
Co-ordinating Newcore’s approach and reporting on environmental impact to external industry bodies such as GRESB and the measurement of the positive social impact generated by its fund strategies
Working on Newcore’s and its funds’ pathway to net zero CO2 emissions
Advising on and implementing improvements to the business to allow Newcore to increase its current B Corporation score from 113 at its next review
Generally promoting Newcore’s sustainable capital management approach to the fund management and real estate industries in which Newcore is involved

Hugo Llewelyn, CEO of Newcore, said: “We are delighted that Kate has joined as a senior member of our team, as we continue to build on our decade-long track record as a sustainable capital management business and B Corporation. Kate’s knowledge and experience in ESG and sustainability, based on her tenure as B Lab’s UK lead, is invaluable to us as we develop and deliver genuine positive impact though our funds and our own management platform”.

The B Corp Certification

The B Corp certification addresses the entirety of a business’ operations and covers five key impact areas of Governance, Workers, Community, Environment and Customers. The certification process is rigorous, with applicants required to reach a benchmark score of over 80 while providing evidence of socially and environmentally responsible practices relating to energy supplies, waste and water use, worker compensation, diversity and corporate transparency. To complete the certification, the company will legally embed their commitment to purpose beyond profit in their company articles.

About B Lab UK:

B Lab UK is transforming the economy to benefit all people, communities, and the planet. A leader in economic systems change, our global network creates standards, policies, and tools for business, and we certify companies—known as B Corps—who are leading the way. To date, our global community includes 4,900 B Corps in 78 countries and 153 industries, and over 150,000 companies manage their impact with the B Impact Assessment and the SDG Action Manager.

Newcore secures £90 million of senior debt facilities

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Article

date

July 19, 2022

Newcore Capital, the UK social infrastructure real estate investment manager, has secured £90 million of senior debt facilities for three of its funds and a separate account.

The four transactions comprise:

a new £40 million facility from OakNorth Bank for Newcore Strategic Situations V LP, a £300 million value-add, social infrastructure fund which held a first close in December 2021; the fund has a target loan-to-value ratio of 30% when fully invested
a £32.6 million refinancing and increase of a £22 million senior facility arranged by Rothschild & Co for Newcore Strategic Situations IV LP, its £150 million value-add fund; the fund is fully invested and the proceeds will be used for capital expenditure on assets
a refinancing of an £11 million senior facility from Lloyds Bank for Newcombe Estates, a UK family oﬃce property company, established in 1905, which is managed by Newcore
a refinancing of a £6.2 million senior facility from NatWest for Newcore Strategic Situations III LP

Neil Sarkhel, chief operating officer of Newcore, said: “The four debt transactions demonstrate the good appetite from lenders for the core product that Newcore creates. Newcore’s B Corp status was also a positive factor in the discussions we had with lenders”.

Newcore secures planning consent for 105,000 sq ft Life Sciences Campus

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Article

date

June 14, 2022

Newcore Capital Management, the social infrastructure investment manager, has secured planning consent for the development of a 105,000 sq ft life sciences centre adjacent to Imperial College London’s campus at Ascot on the edge of London.

The consent from the Royal Borough of Windsor & Maidenhead is for the repurposing and redevelopment of Silwood Science Park adjacent to Imperial College London’s Science and Technology Campus in Buckhurst Road. Designed by Sheppard Robson, the project includes the demolition of the existing business centre and construction of a new 56,000 sq ft life science centre, the refurbishment and retrofitting of five existing laboratory buildings, totalling 48,000 sq ft, and a 2,000 sq ft café pavilion and landscaping.

In line with Newcore’s commitment as a B Corporation to meet high standards of social and environmental performance, accountability and transparency, the development has sustainability at its heart. Through passive design, energy efficiency measures and the implementation of low and zero carbon technologies, together with a carbon offset contribution, the development will achieve a 100% site-wide reduction in carbon emissions, once built.

The consent is supported by Imperial College London, with the development integral to its growth plans at Silwood Park. Its campus, which is celebrating its 75^th anniversary this year, is a world-leading hub for conservation, ecological and evolutionary research with unique lab-field eco-test facilities.

Silwood Science Park is an asset in Newcore’s £150 million value-add fund, Newcore Strategic Situations IV LP. Newcore was advised by Savills in the planning process and by Hoare Lea, Gardiner & Theobald and Ramboll.

Harry Savory, CIO of Newcore, said: “We are pleased to have secured this important planning consent in partnership with Imperial and the local authority. Life sciences, particularly those linked to solving societal issues around healthcare and the environment, are essential to UK society and, hence, a core part of our strategy. We currently have other assets in the planning and development process in London, Oxford and Bristol and are keen to add to this portfolio”.

Category: Article

ESG & Impact Report 2022-2023 published

Newcore Capital’s latest Impact Report shows ESG-grounded investment strategy delivers ‘consistently strong returns and social value’

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