Galaxy infra fund to decide on sale by end of Q1

The first state-backed, pan-European infrastructure fund is expected to receive over five bids next month. But shareholders of the €275m vehicle will have to decide whether to sell the whole portfolio or selected assets.

The shareholders of Galaxy – Europe’s first state-backed infrastructure fund – are expecting to receive over five bids next month for the sale of the €275 million vehicle.

Galaxy: sale
decision in Q1

However, a source close to the process said that not all bids will target the entirety of the fund’s portfolio, forcing the fund’s core shareholders to decide on whether to push for a full sale or settle on the divestment of selected assets.  This decision should take place by the end of the first quarter. Bidders are said to comprise mostly institutional investors, such as pension funds, and private equity firms. HSBC is advising Galaxy on the sale.

France’s Caisse des Depots, Germany’s KfW and Italy’s Cassa Depositi e Prestiti, all state-backed banks, decided to wind down the Galaxy fund to channel their resources to the €1.5 billion Marguerite fund, the EU’s new infrastructure and energy vehicle, the source said. If a partial sale goes ahead, there is a possibility that some of the assets might end up being transferred to the Marguerite fund, which is sponsored by the same banks. The European Investment Bank, also a core shareholder of Marguerite, and Polish development bank BGK became Galaxy’s first club investors in 2004.

Galaxy was set up in 2001 to invest in the transport sector in OECD countries, with a special focus in Europe. It has made several investments to date including a 20 percent stake in the consortium that won the UK’s Nottingham Tram PPP, a 66 percent stake in Slovakia’s Bratislava and Kosice airports, a 40 percent stake in the UK’s Exeter airport, a 60 percent stake in Italy’s Sienna airport, and a 35 percent holding in seven ports in southern Australia.