Universities Superannuation Scheme Ltd (USSL) said it has bought 3,000 shared ownership homes from Sage Homes, an entity created by funds managed by Blackstone and Regis Group plc, for £405 million.

Liverpool-based USSL, one of Britain’s biggest pension funds and institutional investors, will rename Sage Homes, a registered provider of social housing in the UK, as Sparrow Shared Ownership. Its portfolio consists of shared ownership homes across 250 sites.

Sparrow Shared Ownership is a registered provider of social housing backed by long-term, patient capital deployed by USS Investment Management Limited, the in-house investment manager for USSL, the sole trustee for USS.

David Avery, chair of Sparrow Shared Ownership, said: “The launch of Sparrow Shared Ownership is an exciting moment for the UK’s shared ownership sector. Thanks to this significant investment of patient, long-term capital from the UK’s largest private pension fund, Sparrow Shared Ownership starts life with more than 3,000 high quality shared ownership homes that are helping thousands of people across the country onto the housing ladder. Our number one focus from day one is on our residents, and we will be working with Sage Homes to ensure a smooth transition of management services.”

James Seppala, Head of Real Estate Europe, Blackstone, said: “Through Sage Homes which was established in 2017, Blackstone has been the largest provider of newly built affordable housing in the country for the last three years. By deploying capital to fund the development of new homes, we are proud to have created an institutional grade portfolio which has, in turn, attracted more long-term institutional capital into the sector. This transaction will allow us to continue to invest capital into Sage Homes to help alleviate the structural undersupply of housing across the U.K.”

Sage Homes, England’s largest provider of newly built affordable homes, was created in 2017 via a joint venture between Blackstone and Regis, committing about £3.7 billion to fund the development of 22,600 affordable rent and shared ownership homes, of which over 17,000 have been delivered to date.