Britain’s biggest private pension fund is in advanced talks to buy into the real estate assets of Butlin’s, the holiday camp operator, in a deal worth more than £300m.

Sky News has learnt that the investment arm of the Universities Superannuation Scheme (USS) is closing in on an agreement that will effectively see it becoming the famous resort chain’s landlord.

If completed, it would be among the most prominent deals struck for years by USS Investment Management.

Bourne Leisure Group, Butlin’s owner, is in separate discussions with one potential buyer of the three-site chain’s operating business, according to insiders.

In recent weeks, bidders including Queensgate Investments, TDR Capital and Terra Firma Capital Partners have dropped out of the auction process.

It was unclear on Tuesday whether Bain Capital or Epiris, which have also expressed interest in a deal, were still in discussions.

It was also not clear whether USS was in formal exclusivity about the property deal.

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USS, which was established in 1974, is Britain’s main pension scheme for universities and higher education institutions.

It has hundreds of thousands of members and billions of pounds of assets.

Among the private companies USS owns stakes in are Heathrow Airport and Thames Water.

Uncertainty about the sale of Butlin’s has intensified since the owner of Parkdean Resorts recently aborted the auction of the UK’s biggest chain of holiday parks, citing the volatile economic outlook.

Butlin’s, which was established by its eponymous founder, Billy Butlin, in 1936, was put up for sale earlier this year with price expectations of about £600m.

Bourne Leisure, which also trades under the Haven and Warner Leisure Hotels brands, decided along with owner Blackstone to put Butlin’s up for sale after concluding that it did not fit with the rest of the group.

Bourne Leisure also owns the Haven and Warner Hotels chains.

According to the brand’s official history, Mr Butlin “felt sorry for families staying in drab guest-houses with nothing much to do” during a trip to Barry Island.

In its heyday, Butlin’s operated from nine sites across the UK, entertaining 1m holidaymakers each year with knobbly knees competitions and glamorous granny contests.

The brand became such an entrenched part of Britain’s popular consciousness that it provided the inspiration for Hi-de-Hi!, the long-running BBC sitcom.

Its fortunes waned with the explosive growth of opportunities for Britons to holiday abroad, but has enjoyed a resurgence as the pandemic has fuelled a boom in staycations.

Butlin’s sites are at Skegness, Minehead in Somerset and Bognor Regis, the traditional seaside town close to the South Downs National Park.

USS and Blackstone declined to comment.

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