UK higher education¡¯s largest pension fund has?invested in the Butlin¡¯s holiday resorts chain as it seeks to shore up its finances post-pandemic.?

The?Universities Superannuation Scheme has?signed a ground-rent deal worth ?300 million with the Bourne Leisure Group to acquire the real estate assets of the brand¡¯s three sites in Skegness, Minehead and Bognor Regis.??

USS ¨C whose joint negotiating committee recently pushed through cuts to members' post-retirement benefits?¨C said that the deal will provide the cashflows needed to pay pensions?in the future but it will have no involvement in the day-to-day running of Butlin¡¯s operations.?A statement?said that this?type of agreement ¡°is increasingly common in the hospitality and leisure industry¡±.

¡°We are very pleased to conclude this acquisition. Butlin¡¯s is a much-loved British institution and this acquisition represents a significant investment in its future whilst providing the long-term cashflows that USS needs to pay the pensions promised to our members,¡± said Mike Powell, head of the private markets group at USS¡¯ in-house private markets team USS Investment Management (USSIM).

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USS?is the UK¡¯s largest private pension scheme by way of assets and also owns stakes in private companies such as Thames Water and Heathrow Airport. It has built a portfolio worth about ?3 billion and is aiming to grow the assets further over time.?

At the scheme¡¯s last valuation, held at the height of the pandemic in March 2020, managers said that the scale of the fund¡¯s deficit ¨C estimated to?run into billions of pounds ¨C necessitated changes including an inflation cap and a reduction in the defined?benefits aspect of the scheme.?Members are likely to be worse off in retirement as a result, with one recent study estimating that staff under the age of 40 face losing between ?100,000 and ?200,000 each.?

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Critics have pushed for a new valuation to be held sooner rather than later after indicators showed a substantial improvement in the value of the scheme as economies opened up again after Covid restrictions ended.

The Butlin's deal comes as Bourne Leisure¡¯s owner ¨C private equity giant Blackstone ¨C tries?to offload?the brand¡¯s operating assets for about ?600 million, with talks understood to be continuing with at least one potential buyer, according to .

Britain¡¯s once much-maligned holiday camps have undergone a recent revival after families were forced to take breaks at home due to the pandemic.

tom.williams@timeshighereducation.com