Why wouldn’t we? Develop North Plc is on a mission to keep North East money in North East hands – here’s how you can invest

The £100 billion question

There’s a thought experiment that Michelle Percy likes to use. Imagine every pound saved by every person in the North East — every pension contribution, every ISA, every modest pot quietly building in the background — gathered into one place. The number you’d be looking at is somewhere north of £100 billion. Now ask yourself: how much of that is currently invested in the North East?

“Pretty much none of it,” she says, simply.

It’s a figure that tends to stop people in their tracks, and it’s one that forms the beating heart of Develop North PLC — the Newcastle-based, London Stock Exchange-listed investment company that Percy joined as Chief Executive Officer earlier this year. The pitch is disarmingly straightforward: that money you’ve been quietly paying into a pension since your twenties, or the ISA you top up when you remember to — it could be doing exactly what it’s doing now, returning what you’d expect, but invested in property assets in the streets you actually walk down, the towns your kids grow up in, the region you call home.

“I started to think: if I get the same return,” says Percy, “why wouldn’t I?”

A fund built on proof

Develop North PLC was established in 2017, originally as a property-backed lending fund. Over those first eight years it built a credible track record: nearly £90 million deployed, 43 projects supported, a gross development value across its portfolio of more than £280 million, and an estimated 12,000 jobs created or supported across the North. It is listed on the main market of the London Stock Exchange and regulated by the Financial Conduct Authority.

But when Percy arrived, the company was in the process of something more ambitious: evolving from a single-platform lending fund into a three-pillar investment company, with a stated target of reaching £300 million in assets under management within five years. The three platforms are development finance (lending to property developers), commercial real estate (offices, retail, industrial and logistics), and residential property. All three are asset-backed, all focused on the North East.

“I was employee number one within Develop North,” Percy says, “although it’s been in existence since 2017. It’s a really interesting juxtaposition — a new start-up, but a business that was already running successfully. It was almost too good to be true.”

The carrier bag on the train – waving our money off to London

At its core, however, Percy’s most compelling argument isn’t directed at institutional investors or combined authorities. It’s directed at North East people – the nurse with a pension she’s never looked at closely, the small business owner with a bit put aside in a Hargreaves Lansdown account, the fortysomething who vaguely knows their money is “somewhere in the market” and has never stopped to ask where.

Percy counts herself among them. She’s had a pension since she was eighteen, but she confesses that, for most of her adult life, she treated it the way most of us do: as a number on an annual statement, somewhere out there in the financial ether.

“I’d have a review every so often,” she says. “But that was it. It was somewhere in the background. I was putting a bit of money in and then I forgot about it.”

It was only when she joined Develop North that she started to ask different questions. Where, exactly, is my money? What is it invested in? And, crucially, could it be doing the same job, returning the same amount, but closer to home?

“When I started to ask those questions,” she recalls, “I found that my pension was in good quality assets, returning what my expectation was. But those assets are not in our region.”

So how does it actually work?

For anyone now thinking about their own pension with fresh eyes, Percy’s practical advice is this: start by asking a simple question of your pension provider or independent financial adviser. Where, right now, is my money sitting? Legally, they are required to tell you. Most people, she suggests, will be surprised by the answer.

From there, an IFA can explore whether pivoting a portion of your pension into a fund like Develop North makes sense for your circumstances. Develop North’s business model targets a 10 to 11 per cent return per annum, with shareholder dividends currently running at 5 to 6 per cent, in line, Percy says, with what her own pensions were already providing.

Alternatively, for those with a stocks and shares ISA or a platform account with the likes of AJ Bell, an Independent Financial Advisor, or Interactive Investor, Develop North shares can simply be bought and sold on the London Stock Exchange like any other listed company.

And the governance? Percy is clear-eyed about the scepticism people might bring. What if the fund doesn’t last? What if things go wrong?

More than bricks and mortar

The social mission woven through all of this is, Percy argues, not separate from the investment case, it’s part of it. Develop North’s commercial properties aren’t passive assets; the company actively supports the businesses that occupy them, connecting them to apprenticeship programmes, skills networks, universities and colleges. Tenants who thrive stay longer. Businesses that grow expand into more space. Communities built around stable employment anchor the very neighbourhoods that make property assets worth holding.

“When small businesses are in that space,” she says, “it can be really difficult for them to run their business and find the connected networks they need. We can work in that space with them. You don’t need to be a genius to work out that supporting them and their growth keeps them longer in those businesses.”