UK – One of the UK's largest pension funds, the £34bn (€41bn) Universities Superannuation Scheme (USS), has stepped up its £2bn expansion into infrastructure, buying the rail line connecting Australia's Brisbane Airport to the city.
The acquisition of Airtrain Holdings, the monopoly train provider linking the state's busiest airport to Brisbane's central business district, should close in early April, pending shareholder approval of the AUD110m (€87m) deal.
Gavin Merchant, senior investment manager for infrastructure at USS, said the company's characteristics were "particularly attractive" to the scheme due to its inflation-linked cash flows.
"The transaction will be fully funded by equity, providing the company with a stable capital structure to deliver long-term sustainable value to its stakeholders," he added.
Merchant noted that the fund hoped to take advantage of its experience from owning the Sydney Airport train line to increase passenger numbers.
Mike Pelly, Airtrain's chairman, added that he thought the company would be in "very good hands", as USS was a large investor in infrastructure globally and possessed a very long investment horizon.
He continued: "The sale price is compelling and demonstrates the attractive investment attributes of Airtrain and its status as a key piece of transport infrastructure that underpins the rapid growth in Brisbane and South East Queensland."
Australian infrastructure manager CP2 advised the fund, continuing its relationship that also saw USS gain a stake in ConnectEast, a toll road operator in the state of Victoria.
The transaction saw CP2 – funded by a conglomerate consisting of Dutch asset manager APG, USS, Denmark's ATP and sovereign investors from Korea, New Zealand and China – acquire the toll road company in late 2011.
CP2 is also an investor in Airport Link Company, the operator of Sydney's airport train service, in which USS has held a stake since 2007.
USS currently invests £788m in infrastructure, but hopes to increase exposure over time, with £2bn earmarked for investment.
The allocation, however, only accounts for a fraction of its £5.7bn investment in alternative assets.
