UPN-00618 - Future Places Fund

Description

Executive Summary & Background: The Investment Team is advancing the development of the £500m Future Places Fund (FPF). The fund is evolving its core strategy to operate as a regional impact investment platform specifically targeting stalled, "oven-ready" housing and commercial schemes across the region. Unlike traditional public sector funding architectures, the FPF will move away from grant reliance. Instead, it will deploy a revolving, largely repayable investment model designed to recycle capital over time, alongside a deal-by-deal co-investment strategy with institutional and pension fund partners to maximize regional impact. The draft investment strategy and structure have recently been formally endorsed by the Strategic Place Partnership Board. The Authority is now finalising the necessary governance and delivery architecture to ensure schemes can be brought forward rapidly. Scope of Requirements: Core Responsibilities and Scope of Work The successful Fund Adviser will be required to manage and execute across the following three core pillars (A,B,C) of the fund lifecycle: A. Origination, Structuring & Execution Pipeline, Origination & Market Engagement • Design and implement an approach for continuous pipeline management, market engagement and opportunity sourcing, including helping the Authority maintain a transparent route for eligible schemes to be considered. This will initially prioritise opportunities capable of demonstrating realistic delivery trajectories within the current mayoral term. • Engage with a diverse network of regional stakeholders, including local authorities, public-sector partners, the local property community, and national developers or investors to source "oven-ready" schemes. Transaction Structuring & Investment Modelling • Design bespoke, deal-by-deal investment structures that balance risk and return while prioritizing capital recyclability and delivery. • Structure appropriate pricing, tenors (typically ranging from 3 to 5 years), and clear exit strategies-including complex repayment hierarchies (e.g., senior debt recovery followed by FPF equity capital recovery) and profit-share/upside mechanisms. End-to-End Due Diligence & Transaction Execution The adviser will have primary responsibility for driving transactions through a structured, 4-stage governance and underwriting process: • Investment Overview: Producing concise, one-page investment overviews for initial deal screening. • Stage 1 (Heads of Terms): Negotiating and finalizing commercial Heads of Terms (HoT) with prospective borrowers and recipients. • Stage 2 (Detailed Due Diligence): Undertaking rigorous financial, commercial, and risk due diligence on the sponsor and the scheme. • Closing: Managing the finalization of loan/equity documentation and overseeing financial closing. B. Ongoing Portfolio Management & Asset Monitoring Following financial close, the Fund Adviser will be responsible for the active commercial and operational management of the invested portfolio to safeguard public capital and ensure delivery. Responsibilities include: • Drawdown & Capital Deployment Management: Overseeing the monthly loan/equity drawdown process. This includes reviewing and validating Independent Monitoring Surveyor (IMS) reports, verifying "cost-to-complete" metrics, and ensuring funding is released only against verified development milestones. • Construction & Milestone Tracking: Actively monitoring on-site construction progress against agreed development programs. The adviser must proactively identify project delays, supply chain disruptions, or contractor insolvency risks before they impact fund deployment. • Covenant & Compliance Monitoring: Continuous tracking of borrower compliance with financial and non-financial covenants, including Loan-to-Value (LTV), Loan-to-Cost (LTC), interest cover ratios, and legal obligations. • Asset Restructuring & Workout Support: In the event of project distress or underperformance, leading on variations, extensions, or refinancing negotiations to protect the FPF's capital and ensure project completion. C. Impact, ESG & Output Reporting Embed the fund's core performance metrics into the initial appraisal and long-term monitoring of every transaction. Ensure all approved investments explicitly track and deliver against the fund's primary output metrics, specifically: o Housing Delivery: Total homes built, with a primary focus on maximizing affordable housing across all tenures. o Economic Growth: Jobs created and safeguarded through commercial, industrial, and mixed-use developments, alongside overall GVA growth. o Sustainability & Regeneration: Total acreage of brownfield regeneration achieved and measurable carbon reduction outputs. Total value (capped) • The management fee is capped at £200,000 per annum excl VAT with a maximum capped value of £1,000,000 excl VAT for the maximum possible five year term. • This value excludes the transactional and market facing fees. Estimated Contract dates: 3 years + optional 1 year extension + optional 1 year extension. Maximum possible term is 5 years.