Project overview

Establishing a place-based, social impact investment fund.

Capabilities demonstrated: Creating a value proposition that translates business need into a tangible project with a clear purpose.

Client: Broadoak Asset Management.

Date completed: February 2023.

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The job to be done

Assess the feasibility of establishing a place-based, social impact investment fund, to enable the delivery of Newcastle's Creative and Cultural Zone.

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The key challenges

Newcastle City Council has secured £1.7m to create a distinctive new cultural destination in the city. The funding is being used to catalyse the growth of the cultural economy and the wider economy of the city by:

• Creating physical spaces for collaboration and performance

• Attracting and retaining creative talent with tailored skills and training for business and cultural/creative organisations

• Attracting visitors to the CCZ with innovative events and performances

 

To create sustained success, additional funds will also be required to reinvigorate the buildings and public realm within the CCZ. This is against a backdrop of historically low levels of investment in the existing commercial property stock, and high levels of vacant properties (post Covid). A place-based social impact investment fund for the CCZ would need to leverage the value of existing assets to attract a blend of public and private capital that can then be used to:

• Attract and sustain new investment into the buildings and infrastructure

• Deliver circa £6-£12m of capital works

• Establish meanwhile and other cultural uses aligned to the CCZ vision

• Achieve the council’s net-zero targets

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The approach taken

Working with Professor Paul Greenhalgh from Northumbria University, we were commissioned to prepare a ‘pre-feasibility study’. Drawing on place-based regeneration, and investment fund good practices, we interviewed local and national developers, investors, and regeneration experts to seek their perspectives on 5 questions:

1. What is the opportunity (and challenge) to be addressed by this fund?

2. Is there an investment case for establishing a fund – is there sufficient value in the assets to finance its regeneration?

3. How can partners work together to realise the value and deliver the CCZ?

4. What blend of funding and finance can we use to realise the potential of the assets?

5. What should we do next to progress this idea?

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Outcome and impact

Our report identified:

• Several buildings that could catalyse development and reduce the need for grant/gap funding over time.

• A range of financial tools and incentives that could be used to attract investment and how these might be brought together in a public/private backed delivery vehicle.

• The need for significant stakeholder support, fostered through the co-design of a strong vision and narrative with financial incentives.

• A roadmap of strategic, business, and commercial activities to bring these strands of work together.

 

Next steps to develop the feasibility of the fund are now being considered.