Ahead of the Label
8 September 2026
In 2019, STAR acquired ASL, a business providing aircraft wet-leasing capacity to the express freight and ecommerce market. In 2025, McKinsey published The Infrastructure Moment, which presents a large infrastructure manager's acquisition of Air Transport Services Group, a freighter aircraft leasing business, as logistics infrastructure. The underlying economics of the sector had not fundamentally changed, but the way the market viewed it had.
Capital moves in waves. For years, a sector can be priced as ordinary: cyclical, operationally demanding and outside the categories that attract the largest pools of institutional capital. Over time, a different pool of capital may begin to view the same assets as belonging in a more defensive category. Often, many of the characteristics supporting that classification were already present.
That does not mean that identifying a potential rerating is an investment strategy. For STAR, recognising those characteristics is only the starting point. The more important question is whether we can use our experience and ownership approach to improve the quality, resilience and duration of the underlying cashflows.
The same McKinsey report cites an investment in Forgital, a manufacturer of aerospace and defence components, as defence infrastructure. Neither forging nor aircraft leasing fits the traditional image of infrastructure. Yet both can exhibit characteristics familiar to infrastructure investors: capital intensity, high qualification barriers, difficult-to-replicate assets, long-term customer relationships and essential roles within critical supply chains.
Classification matters because it influences who can own an asset, the return those investors require and the valuation framework applied to it. A business once compared with cyclical industrial peers may eventually be assessed against a very different universe of assets. But it is important not to reason backwards from that outcome. Asset intensity does not create resilience, contracts can lock in poor economics and strategic relevance can coexist with concentration, technological risk or weak cash conversion. Many businesses that appear misclassified are simply cheap for good reason.
Our focus is therefore on the economic role a business performs and what can be done to strengthen it. We look at how essential the product or service is, how easily it can be replaced, what protects the revenue base and how cashflow performs when conditions deteriorate. We then assess what needs to change for those characteristics to translate into a stronger business.
That work can take many forms. It may involve strengthening the management team, improving operational efficiency, reducing working capital, addressing supply chain constraints or investing in systems and capacity. The objective is not simply to identify a business that the market may one day classify differently. It is to improve the business so that its cashflows become more resilient, visible and valuable.
Vincorion is a recent example. When STAR acquired the business in 2022, its strategic position in defence and aviation was clear, but there was work to do operationally. STAR worked with the company to address those issues while building on its specialist engineering capabilities, demanding qualification requirements and recurring aftermarket revenues. Vincorion listed in Frankfurt in March 2026.
ASL reflects the same approach in a different sector. Its fleet, operating certificates, traffic rights and operational capabilities are difficult to replicate. Those characteristics underpinned our decision to invest in the business in 2019, but the business required operational development. The later acquisition of Air Transport Services Group provided the sector with a visible infrastructure reference point. It did not create the underlying characteristics that made ASL attractive, nor did STAR's investment case depend on that reference point emerging.
This approach predates both investments. For more than 25 years, STAR has invested thematically across sectors including edge data centres, rolling stock and regulated utilities, where strategic importance was not always fully reflected in valuation. The sectors have changed, but the characteristics we look for have remained consistent: essential services, scarce assets, high barriers to entry and the potential to develop resilient, visible cashflows.
Our investment case does not depend on the market ultimately applying a higher multiple. We underwrite returns based on the cashflows, operational development and sustainable growth of the business. A change in how the market values or classifies the asset can provide additional upside, but it is not necessary for the investment thesis.
The boundaries between investment categories will continue to move, and infrastructure is only one example of that broader phenomenon. We do not invest on the assumption that the market will eventually recategorise an asset. We invest where we see the opportunity to build a stronger and more resilient business, supported by characteristics that may not yet be fully recognised. If the market ultimately applies a different classification or valuation framework, that should be a consequence of what the business has become, not the reason we invested in the first place.