Arcus Infrastructure Partners LLP

Asset ManagerFrancesco Nale

Status Realised (2015)

Overview

  • Sector transport
  • Vehicle AEIF1
  • Investment Year 2008
  • Country UK

Key Metrics

  • Ownership 43.4%
  • Employees c.120
  • Market Share 34%
  • Passenger Vehicles c.4,300

Investment Rationale

  • Rail is a popular transport choice in the UK and new trains are required to be built to meet rising passenger demand and for future electrification.
  • Rolling stock owners provide a key infrastructure asset to rail service operators under medium to long-term contracts insulated from passenger demand risk.
  • Rolling stock assets present a 30 years expected asset life and we identified significant opportunities for extensions and upgrades, which bring economic benefit to the owner.
  • Growing passenger demand and high visibility of future tendering processes result in very high utilisation rates for existing assets and accretive new build opportunities.
  • Rolling stock companies enjoy very robust cashflows and dividend yields, with upside arising from asset improvement and new build opportunities.

 

Asset

  • In August 2015, the fund completed the sale of its entire stake in Angel to existing shareholders, at a return well above the entry investment case.
  • During the Arcus ownership period, Angel expanded its rolling stock portfolio and invested £690 million in new build opportunities, procuring 336 additional vehicles.
  • Angel achieved 12% EBITDA growth during the period Arcus held the investment.