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Portfolio

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Sector

Structured Finance

Location

UK

Entry date

December 2010

Exit date

April 2015

Fund

STAR II

Status

Realised


Overview

In December 2010, Eversholt Investment Group, a consortium comprising 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, co-invested alongside STAR.

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.

Eversholt Rail Group is one of the three leading rail rolling stock companies in the UK. At the time of acquisition, it owned 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 were leased to seven train operating companies and its revenues were primarily derived from long-term lease payments.

During our period of ownership, Eversholt successfully transitioned from a division of HSBC to an independent business. The capital structure was also transitioned from relatively short-term bank facilities on acquisition (4 to 6 years) to longer term debt (with an average maturity of c. 13 years on exit), with the issuance of a mix of public and private placement bonds.

In January 2015, the consortium agreed to sell 100% of Eversholt to CK investments S.a.r.l, a company jointly owned by Cheung Kong Infrastructure Holdings Limited and Cheung Kong (Holdings) Limited.

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