UK - The Universities Superannuation Scheme (USS) has expanded its private equity investment programme by acquiring a $135m (€101m) interest in the Neuberger Berman Secondary Opportunities Fund II from the Lehman Brothers Estate.
This acquisition makes it the largest investor in the $1.77bn fund, which was raised in July 2008. USS, the principal pension scheme for UK universities, is the second largest private sector pension fund in the UK. As of 31 December 2009, it had over £28bn in assets and around 265,000 members.
At present, the fund has around 10% of its assets allocated to alternative investments, with a target to grow this allocation to 20% over the medium term.
Mike Powell, head of alternative assets at USS, said: "This investment gives us a fantastic opportunity to gain more exposure to the secondary private equity returns with a highly experienced team, and strengthen our relationship with NB Alternatives."
The investment shows the strength of USS's opportunistic approach to private equity in general, and co-investments in particular, according to Geoffrey Geiger, the fund's co-investment portfolio manager.
Geiger said: "We now have the resources to move quickly and commit significant capital to transactions with attractive risk-adjusted returns such as this one."
The NB Secondary Opportunities Fund II is run by Brian Talbot, managing director and global head of secondary private equity at Neuberger Berman, and managing directors Ethan Falkove and Tristram Perkins.
The team has closed more than $4bn in secondary transactions since 1991.
Following the USS transaction, the Lehman Brothers Estate retains an interest of around $50m in the fund.