UK’s Largest Pension Buys $531M Worth of Homes From Blackstone Joint Venture

The Universities Superannuation Scheme, the U.K.’s largest pension fund, has paid 405 million pounds ($531 million) for a portfolio of 3,000 shared ownership homes from Sage Homes, a joint venture between private equity firm Blackstone and property management company the Regis Group.

According to Sage Homes, the deal is the largest acquisition of a portfolio of shared ownership homes since the concept was first introduced in the U.K. Shared ownership, created under Britain’s Housing Act of 1980, allows buyers to acquire part of a property if they cannot afford to buy it entirely and provides them with the option to purchase the rest in the future. For example, the purchaser buys an initial share of 25% to 75% and pays rent on the remainder, with the share size determined by the buyer’s ability to afford and sustain the house.

As part of the acquisition, USS has launched Sparrow Shared Ownership to take over the management and operational responsibilities of the portfolio. Sage describes Sparrow Shared Ownership as a registered provider of social housing backed by USS Investment Management Ltd., the in-house investment manager and trustee for the USS.

“Sparrow Shared Ownership will provide further capital into the UK shared ownership sector,” said Eamon Ray, USS’ head of private credit and alternative income, in a statement. “This investment allows USS to use its long-term capital to support the multi-decade nature of Sparrow’s business plan whilst supporting the UK Social Housing Sector.”

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U.K. Prime Minister Keir Starmer, who took office in July, said the British government plans to build 1.5 million homes in the next five years while introducing planning regulation reforms to address the country’s housing shortage.

USS reported 73.1 billion pounds of assets, as of March 31, 2023, the last year for which it has released a summary funding statement.