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USS buys $135m Neuberger interest

The £28bn UK pension scheme has bought an “early secondary” in Neuberger Berman Secondary Opportunities Fund II as the pension seeks to expand its co-investment activity.

The Universities Superannuation Scheme (USS) has bought a $135 million interest in Neuberger Berman Secondary Opportunities Fund II. The acquisition of the interest, which was bought from the estate of failed bank Lehman Brothers, makes USS the largest individual LP in the $1.77 billion fund.

The price paid for the fund interest was not disclosed.

Brian Talbot, managing director and global head of private equity secondaries at Neuberger Berman, described USS’ acquisition as “a strong vote of confidence” in Neuberger’s team and strategy.

The fund, which held its final close in July 2008, is just 25 percent called, having acquired a portfolio of 21 private equity investments from an unnamed European family office in a deal that completed December 2009.

Mike Powell, head of alternative assets at USS, said the transaction was led by the pension’s in-house co-investment team. Co-investment is an “an area of increasing focus as [USS continues] to expand [its] private equity investment programme,” he said in a statement.

Following the USS transaction, the Lehman Brothers Estate retains an approximately $50 million interest in the fund.