UK social infrastructure investment manager Newcore Capital has acquired seven assets in Greater London and neighbouring commuter towns for £25m (€29m) on behalf of its fifth fund.
The transaction follows the £190m final close for Newcore Special Situations V (NSS V), which is backed by investors including Merseyside and Clwyd local government pension schemes, two European fund-of-funds managers, insurance and corporate pension schemes, family offices and high-net-worth individuals.
The assets purchased in Greater London include children’s nurseries in Whitton and Clapham, both occupied by Fennies Day Nurseries. The portfolio extends to towns surrounding London, including a school in Walton-on-Thames, Surrey, which Newcore has leased to Outcomes First Group, the UK’s largest independent provider of special educational needs.
The final children’s nursery, occupied by Monkey Puzzle Day Nurseries, is located in Beaconsfield, Buckinghamshire.
Newcore also acquired two petrol filling stations with electrical-vehicle charging potential in Crouch End and Streatham.
The investment manager also acquired its first mortuary in Surrey, operated by Dignity Funerals. It means that Newcore Capital has entered the funeral care sub-sector for the first time. It says this market segment is marked by a mismatch between supply and demand, driven by the UK’s ageing population and a limited land supply for the specialist use.
Harry Savory, CIO at Newcore Capital, said: “Newcore is always looking for opportunities to invest in assets that provide essential services to society, and we are pleased to include funeral care in our most recent acquisitions. It is a sector constrained by planning, which services a genuine societal need, particularly in locations with an ageing population.
“Newcore aims to deploy £350m over the next two years for NSS V. Target asset classes include education and childcare, healthcare, storage, life sciences, waste management, roadside and transport.”
Savory said Newcore’s acquisition strategy is “to acquire tired, short-leased or vacant assets and land, typically between £2m and £25m in lot size”, in good towns and locations. The investment manager then works with tenants to deliver future-proofed social infrastructure.
“Brexit, COVID-19 and the Ukraine war have all led to a focus on resilience – finding investments that will be immune to macro-economic shocks and technological disruption – and we can think of nothing more resilient than assets that enable the provision of basic, essential services to society,” Savory added.
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