Hugo’s recent column for i3 highlights the growing role of private capital in addressing the infrastructure funding gap, emphasising the need for long-term, sustainable investment practices. It stresses that infrastructure investments should avoid excessive leverage and high management fees to ensure stability and societal benefit. Examples like Thames Water show the risks of over-leveraging and underinvestment, which can lead to financial instability and social costs. The article advocates for a “social licence to operate” for infrastructure managers, ensuring ethical practices and long-term success. Proper management reduces risks and improves long-term returns for investors.

Read the full article here.

By Kali Persall

Our CEO, Hugo Llewelyn recently spoke to Kali Persall at i3 to discuss the importance of both a social and financial licence to operate and how these have become a vital component of delivering successful infrastructure projects.

Establishing trust with local communities and stakeholders is crucial when delivering infrastructure projects, especially those that could impact local resources or the environment. A “social license to operate” refers to an unwritten agreement based on trust and ongoing approval from the community. While not legally binding, its importance is significant, as it can greatly influence a project’s success or failure. Losing this trust can harm a company’s reputation and make it difficult to regain. A strong social license signals that a company is focused on social and environmental impacts, reducing the likelihood of negative events and the reputational harm when they occur. Managing reputational risks well is key to maintaining a strong social license.

For Newcore, a social licence involves taking an ethical approach to capital management in infrastructure across four levels: at the asset level in terms of looking after stakeholders; at the fund level in terms of paying taxes, maintaining transparency and using appropriate leverage; at the manager level in terms of adopting a balanced approach in dealing with all stakeholders, including the environment and communities one works with; and at the principal level, with the behaviour of the owners of the business being consistent with the other tiers.

Read the full article here.

By Greg Pitcher

Hugo Llewelyn recently spoke with Greg Pitcher from Property Week about the north-south divide in later-life housing development. In this sub-sector of social infrastructure, Newcore generally focuses on acquiring land for retirement housing, securing planning consent, and then selling to specialist developers. In the article, Hugo comments on the need for more land allocation for senior housing; and clearer guidelines on retirement housing planning classifications.

Read the full article here.

By Nick Herbert

Our CEO, Hugo Llewelyn recently spoke to Nick Herbert at Investors in Healthcare to discuss the attractions of investing in primary healthcare and why current market conditions make it a good time to take exposure.

Newcore has successfully invested in social infrastructure, including healthcare, for over a decade. The firm’s strategy focuses on acquiring under-utilised or vacant properties and refurbishing them for long-term use. It invests specifically in healthcare infrastructure, avoiding operational risks by leasing buildings to healthcare providers. In 2024, Newcore acquired 15 primary healthcare assets for £50 million, and is looking for further opportunities in the sector.

In this article, Hugo explains that primary healthcare is central to Newcore’s strategy because it’s essential for society and benefits from long-term demand. Newcore sees significant opportunity in refurbishing outdated healthcare infrastructure, especially as the NHS aims to reach net-zero emissions by 2040.

Read the full article here.

Our CEO, Hugo Llewelyn recently contributed to Institutional Investing in Infrastructure (i3)’s October issue – Windows of opportunity: Why U.K pension funds should look at social – as well as economic – infrastructure.

A survey by GLIL Infrastructure Partners revealed that 65% of U.K. pension fund leaders plan to increase infrastructure investments over the next year, primarily focusing on economic infrastructure like energy and water. However, there is a surprising lack of attention to social infrastructure, which encompasses critical services such as healthcare, education, and waste management.

Social infrastructure not only has the potential for strong financial returns but also delivers significant social and environmental benefits. Survey respondents indicated that positive impacts on local communities and the U.K. economy are major reasons for their interest in infrastructure investments.

Given demographic trends like an aging population and rising wealth inequality, the demand for social infrastructure services is likely to grow. Additionally, the financial strain on government and private equity increases the need for reliable funding for these essential services.

Investing in social infrastructure presents a compelling opportunity, especially for funds seeking sustainable and resilient portfolios. The article argues that pension funds should naturally gravitate towards social infrastructure without needing coercion from the government, as it aligns with both fiduciary responsibilities and broader social goals.

Read the full article here – https://lnkd.in/eTUUckxq

By Beth Mattson-Teig

Hugo Llewelyn, CEO of Newcore Capital, recently contributed to Beth Mattson’s article, emphasising the need for a genuine approach to sustainability to attract capital and achieve results, noting that sustainable investing is increasingly essential for effective risk management, especially concerning long-term environmental issues.

The article discusses the increasing importance of environmental, social, and governance factors in infrastructure investment, highlighting a significant 75% rise in participation in the GRESB Infrastructure Assessment over the past five years. In 2023, 172 funds reported on 687 global assets valued at over $1.2 trillion. While some fund managers are leading in ESG practices, others are being pressured by investors and regulatory changes. Despite facing economic and political challenges, including anti-ESG sentiment, demand for sustainable strategies remains strong, particularly from institutional investors like pension funds.

In the article Hugo also notes a more scientific approach to sustainability measurement, with property companies now capable of accessing precise data on their environmental impact, particularly regarding carbon emissions and waste. Fund managers are increasingly able to quantify efficiency gains, tracking energy and water usage to demonstrate payback periods on investments and access to lower-cost sustainable financing.

Read the full article here – https://irei.com/publications/institutional-investing-in-infrastructure/