The Universities Superannuation Scheme (USS) has agreed a “strategic partnership” with private credit specialist Venn Partners to target investment in the UK housing market.
USS – the biggest pension scheme in the UK with £77bn of assets under management – has purchased a controlling stake in Venn from Asian asset management giant ESR. Completion is subject to regulatory approvals and is slated for the second quarter of this year.
In a statement, Venn Partners said USS would act as “a long‑term, patient capital provider”, expanding the asset manager’s capacity and deployment capabilities.
Venn currently manages more than £10bn across four strategies focused on the UK residential market, including the affordable housing and private rental sectors, and is also responsible for facilitating government lending programmes. It deployed more than £1.8bn of capital last year.
Eamon Ray, head of private credit at USS Investment Management, said the pension fund believed that an allocation to the UK residential market could “deliver high quality, long duration, inflation-linked exposure, while also providing valuable housing options”.
“Venn’s approach aligns with USS’s philosophy of deploying capital responsibly and at scale into sectors of strategic importance, and we have been impressed by its capabilities to deliver long-term financing solutions for major patient capital investors and on behalf of the UK government,” Ray added.
USS’s recent activity in the UK residential property and lending markets includes the launch of Sparrow Shared Ownership in 2024, which provides more than 3,000 shared ownership homes, and last year’s securitisation of a portfolio of equity release mortgages, dubbed “Summerhouse”.
Gary McKenzie-Smith, managing partner at Venn, said the company had been working on various areas of its operations – including origination, underwriting, and risk management – to be able to facilitate significant institutional investment in the property market.
He added: “With these foundations and a strong track record in place, we are excited by the growth opportunity that lies ahead and are delighted that USS has agreed to join us on this journey. As a proven and highly-regarded institutional investor with a shared culture and vision, we are confident that our partnership with USS will be able to unlock Venn’s ambitious plans as well as meet their long-term investment goals.”
