Partners Group emerges as buyer on USS’s PE secondaries sale

The USS sale marks the latest sizeable LP-led portfolio that Partners Group has backed in recent months.

Partners Group has stepped up as the buyer on UK pension fund administrator Universities Superannuation Scheme’s portfolio sale, sources have told Secondaries Investor and affiliate title Buyouts.

USS has been shopping a portfolio of private equity fund stakes valued at $800 million or more with Evercore advising on the transaction, Buyouts reported in March.

Pricing improvements have led many LP sellers to market this year as they grapple with a slowdown in distributions. Such deals represent 65 percent of the $27 billion-$32 billion of transaction volume seen in the first quarter of this year, according to a PJT Partners report.

USS’s private equity funds and co-investment segment has committed more than £10 billion ($12.7 billion; €11.7 billion) to over 80 funds and more than 50 co-investments since it was set up in 2007, according to its website. Its preferred ticket sizes are between £75 million and £150 million-plus for fund stakes and between £15 million and £50 million for co-investments.

The total value of the sale should fall into a range of $800 million-$1 billion, though the final size depends on what sells, Buyouts reported this year. USS’s sale includes funds from GPs including Cinven and Carlyle Group.

USS is a repeat secondaries seller, having offloaded at least two large portfolios since 2015. The system reported around £73.1 billion in assets in its defined benefit plan.

Spokespeople for USS and Partners Group declined to comment, while Evercore could not be reached for comment by press time.

The USS sale marks the latest sizeable LP-led portfolio that Partners Group has backed in recent months.

In September it emerged the Switzerland-headquartered firm would pick up a portfolio of partial stakes in funds and co-investments with a net asset value of roughly $1.1 billion shopped by Canadian pension giant Caisse de dépôt et placement du Québec. The deal was Partners Group’s largest secondaries deal on a total adjusted commitment basis, a source told Buyouts.

Blended average LP-led pricing reached 82 percent of net asset value in the second half of last year, with volume reaching $38 billion, up from 78 percent of NAV in the first half, according to a year-end report from Evercore.