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STAR acquired the Secondary Market Infrastructure Fund ("SMIF"), the first active secondary PFI Fund, in December 2003.
The portfolio had a net asset value of approximately £120 million and comprised of 23 underlying assets including interests in the education, local authority and health sectors.
SMIF's strategy was to acquire interests in infrastructure
assets from investors in and developers of PFI and PPP assets, thereby
allowing them to release capital for re-investment in new projects.
PFI and PPP assets deliver essential services in the areas of transportation,
education, healthcare and the general administration of government
and will require continued private sector funding going forward.
Other essential social and public infrastructure has also be considered
along with similar European assets.
During STAR's period of ownership, other institutional investors were brought in to support the acquisition strategy in 2005/2006. The management team were also shareholders in the business
Why did SMIF fit STAR's investment strategy?
- The underlying assets provide essential social services.
- The underlying assets generate strong and long term cash flow,
providing good downside risk protection.
- SMIF is run by a strong and experienced management team.
- SMIF provides an excellent platform from which to enhance the value of relatively static, standalone assets through optimisation of individual asset cashflows as well as efficiencies at the portfolio level.
Following 3 years of significant growth, SMIF had built a portfolio of interests in 80 projects, including the British Embassy in Berlin and the M40 motorway in the UK. In addition, SMIF established an asset management division to monitor and drive value from the underlying portfolio. The Business was sold to Land Securities Trillium in February 2007 for £927m.
http://www.smif.com
 
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