The UK’s Universities Superannuation Scheme (USS) is acquiring a majority stake in European residential real estate private credit manager Venn Partners as the firm ends its six-year partnership with ESR.
Venn said USS, the UK’s largest private pension scheme by assets, will act as a long-term, patient capital provider to the firm.
Venn first partnered with ARA Asset Management in 2020, when ARA acquired a majority stake in the firm. In 2022, ESR completed the acquisition of ARA, which brought Venn into the broader ESR group.
The latest transaction with USS will also see the management team of Venn increase its ownership stake in the business. The deal will result in a full exit for ESR from Venn as the group refocuses on its core logistics and data centre platforms.
Venn currently manages in excess of £10bn (€11.5bn) across four strategies in the UK, as well as a residential mortgage strategy in the Netherlands.
USS’s backing will enhance the capacity of Venn to deploy capital across the UK housing market and scale its existing residential real estate private credit platform, Venn said.
Gary McKenzie-Smith, managing partner of Venn Partners, said: “Over the last 15 years, Venn has carefully put in place the foundations for a business that is able to channel institutional capital at scale into the residential sector. This includes diligent strategy selection and origination protocols, robust parameters in underwriting and risk management and a well-constructed and scalable operating infrastructure. This is all underpinned by our proprietary risk management system, as well as a dedicated team of professionals with shared values and a culture of responsibility.
“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.”
Eamon Ray, head of private credit at USS Investment Management, said: “This new partnership reflects USS’s support for the UK residential market, a sector that can deliver high-quality, long-duration, inflation-linked exposure, while also providing valuable housing options across the UK.
“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.”
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