| In December 2010, Eversholt Investment Group, a consortium comprising STAR Capital Partners ("STAR"), 3i Infrastructure plc and Morgan Stanley Infrastructure Partners completed the acquisition of Eversholt Rail Group (“Eversholt”) from HSBC Holdings. PGGM, a major LP in the STAR II fund, has co-invested alongside STAR.
Eversholt Rail Group is one of the three leading rail rolling stock companies in the UK. It owns approximately 29% of the total current British rail fleet with 19 fleets of rolling stock, specifically designed and built for the UK rail network. The fleets are leased to seven train operating companies and its revenues are primarily derived from long-term lease payments.
Since privatisation the UK has experienced a consistent upward trend in passenger rail travel. This growth has led to increasing demand for trains especially in those parts of the network that are already operating at high capacity, such as the London & South East area where Eversholt’s fleet is principally concentrated. This growth is expected to continue in the coming years.
The consortium believes that there will be interesting opportunities to create additional value; through the upgrading and life extension of the existing fleet and the acquisition of new trains as and when required.
Why does Eversholt fit STAR’s investment strategy?
- Eversholt’s rolling stock fleets are an essential part of the UK’s transportation infrastructure.
- Eversholt has strong market share and a well-diversified customer base.
- Eversholt has high quality cash flows from leases contracted over the medium to long term providing considerable downside protection.
- The business is capital intensive, its asset base is highly utilised and continuing rail passenger growth is likely to result in the fleet becoming even more valuable in the future.
- There is an opportunity to invest in the existing asset base to improve its quality and/or extend its life and, in the medium term, to acquire new rolling stock.
 
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