A local government pension scheme (LGPS) fund and the Parliamentary Contributory Pension Scheme have made a cornerstone investment in the Newcore Social Infrastructure Income Fund (NSIIF).

The fund also secured investment from an insurance company client of Capricorn Private Investments, as part of its first close.

The first close provided NSIIF with £100m investment capacity to deploy into the current dislocated real estate market, with the fund set to target 9-11 per cent annual returns and a 4-5 per cent annual dividend.

The fund will be semi-open-ended, with structured liquidity flows for primary redemption and new capital raising.

Its objective is to deliver sustainable long-term income and capital returns from a functional portfolio of UK real assets, enabling essential social infrastructure uses, such as education, childcare, clinical healthcare, transport, and waste management.

The fund proposed several measures to achieve this, such as reducing underutilised vacant spaces to meet the demands of social infrastructure, deploying a refurbishment-first approach, and recognising embodied carbon.

It also outlined plans to create new, fit-for-purpose social infrastructure provisions on a de-risked financial basis, aligned with net-zero ambitions, and maintaining and upgrading the fabric of social infrastructure buildings where there could otherwise be a negative impact from the restricted use or loss of that space.

A circa £300m pipeline of potential acquisitions has been identified across the UK.

Newcore Capital CEO, Hugo Llewelyn, commented on the development: "We are pleased to have achieved the first close for the fund, securing three noteworthy institutions as cornerstone investors.

“This milestone has been achieved against the backdrop of a particularly difficult capital-raising market and demonstrates that a clear three-dimensional focus on sustainability - financial, environmental, and social - can deliver positive results for fund managers by securing commitments from high-quality investors with similar aspirations for their capital."

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