18 Dec 2003
STAR Capital Partners acquires Europe's First PFI Secondary Fund
STAR Capital Partners ("STAR"), the European private equity fund specialising in acquiring strategic assets announces the acquisition of the "Secondary Market Infrastructure Fund" ("Fund"), the first active secondary PFI Fund.
The existing portfolio comprises 23 assets with an underlying gross asset value of £2 billion. These include interests in the education, local authority and health sectors and have been aggregated over time by principals including Abbey National, Babcock and Brown and Espírito Santo Investment. The current portfolio has a net asset value of approximately £120 million with a pipeline of acquisitions of a further £100 million. STAR's strategy is to grow the underlying asset base to some £500 million through the acquisition of further interests in the Private Finance Initiative ("PFI") and European Public Private Partnership ("PPP") markets.
PFI and PPP assets deliver essential services in the areas of transportation, education, healthcare and the general administration of government. These assets show strong resilience to the economic cycle. STAR has committed capital to this venture with the objective of creating and growing a diversified portfolio of assets, producing high quality long term earnings.
The Fund will be managed by William Doughty, Ian Gethin, Robert Rees and Barry Williams, a team with a proven track record and a wealth of experience in the sector. The Partner at STAR responsible for structuring the transaction is Uniti Bhalla who will be on the board of the Fund helping to develop the strategy with the management team.
The Fund expects to complete seven further acquisitions prior to the end of the first quarter 2004 on which it is exclusive and is in active negotiations with several other prospective vendors.
Tony Mallin, Chief Executive of STAR said:
"Having personally been involved in the PFI since its beginnings, I have always believed in the attractions of the PFI market and its euro equivalents as an investment class that is resilient to economic down turn and produces good risk adjusted returns. With the benefit of the scale and pan European reach that STAR intends to bring to this venture, diversity will further enhance the intrinsic value of this asset class."