Merseyside and Clwyd local government pension schemes (LGPS) are among investors that have helped Newcore Capital Management raise £190m (€219m) for its latest value-add UK social infrastructure and real estate fund.

Newcore said the capital raised for Newcore Strategic Situations (NSS) V at its close gave the fund close to £350m of investment firepower when including leverage.

NSS V’s backers also include two European fund-of-funds managers, 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 with a main focus on Greater London and the South-East of England.

The closed-ended fund has a seven-year life and aims to deliver an annual net internal rate of return of 13-15%, using leverage of up to 30% loan to value.

Newcore launched NSS V in March last year with a £60m investment firepower after receiving commitments from its existing investor base.

Newcore said the early investors in the fund included a number of high-net-worth individuals introduced by Coutts, via its investment club.

Newcore Capital CEO Hugo Llewelyn said: “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, COO at Newcore Capital, said: “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.”

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.”

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