The Universities Superannuation Scheme (USS) and Places for People (PfP) have entered into a £330m joint venture to invest in the UK private rented sector.
The collaboration will involve USS providing the core funding while PfP will act as asset manager, with Touchstone, PfP’s specialist property management business, managing the portfolio on a day-to-day basis.
The joint venture, which will be managed by Tim Saunders, fund director at PfP Capital, will acquire a seed portfolio of residential assets from PfP for approximately £150m, with an option to acquire a further £10m of similar assets post completion. PfP will retain a 10% stake in the joint venture.
Alex Turner, deputy head of Property at USS comments on the deal: “This new joint venture establishes our foothold in the PRS sector, which has experienced strong growth in recent years with a bright long-term outlook. Our relationship with PfP Capital and their knowledge of the sector will enable the joint venture to identify well-priced assets across the country.”
PfP Capital announced its intention to launch a UK residential property portfolio last year and has since engaged with a range of potential investors. USS was subsequently selected as the group’s preferred partner.
USS is among a number of pension schemes which are looking to expand their property investments, as covered in portfolio institutional‘s cover story in April/May.
Other funds with a focus on property investments include RPMI Railpen, which has 12% of its £28bn AUM invested in property, and the Lancashire County Pension Fund (LCPF), which has an £840m real estate portfolio, while London Pensions Fund Authority (LPFA) has £400m in the sector.
