ESG & Impact Report 2022-2023 published
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.
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.”