The UK’s largest pension scheme has acquired VTG UK, a rail freight company, from its German parent in its latest domestic private markets push.
The £84bn Universities Superannuation Scheme (USS) is to acquire 100% of the UK arm of VTG as part of its strategy to “have greater direct ownership in businesses where it can add long-term value”, according to a statement from the pension scheme.
VTG Rail UK runs the largest private wagon and tank container fleet in the country, and comes as the government has announced plans to increase rail freight by at least 40% by 2040 and 75% by 2050.
Rob Horsnall, head of direct equity in USS’s Private Markets Group, said: “This investment reflects our strategy of deploying long-term, patient capital into resilient infrastructure businesses that can generate stable, predictable, inflation-linked cashflows for our members over many years.
“With its strong asset base and market-leading position, VTG UK is well placed to support the UK’s growing rail freight sector and the UK government’s ambition to increase rail freight capacity in the years ahead.”
Mani Herold, chief financial officer of German parent company VTG, said the deal would allow his firm to develop its continental business, while USS was “a strong owner for VTG Rail UK as it enters its next chapter of growth”.
The transaction is expected to complete in the fourth quarter of this year.
Insight’s fiduciary appointment to support surplus sharing
Insight Investment has been appointed to a £1bn fiduciary management mandate for an unnamed UK defined benefit (DB) pension scheme.
The asset manager will oversee investment strategy, implementation and day-to-day governance, working with Law Debenture as the scheme’s sole corporate trustee. The arrangement will also facilitate surplus sharing, according to Law Debenture.
Emma Pittaway, a professional trustee at Law Debenture, said: “Although not right for all situations, we see a commonality between some of the principles behind corporate sole trustee and fiduciary management, and in this particular instance where the scheme is well funded and sharing surplus.
“Having worked with Insight over a number of years, we know first-hand the high calibre of their service and the depth of their expertise. We look forward to working closely with the Insight team as we continue to support the scheme’s long-term objectives, ensure security for members and consider surplus arrangements into the future.”
Serkan Bektas, head of Insight’s Client Solutions Group, said: “Our partnership on this mandate aims to support reliable investment outcomes within a highly collaborative partnership framework, enabling greater clarity on surplus sharing and member security. We greatly value the working relationship between Law Debenture and Insight, and we are pleased to have been appointed for such a significant fiduciary management mandate.”
The news comes as the government has just closed its consultation on surplus sharing rules, with feedback indicating a need for greater clarity in several areas.
