Oaktree exits US’s sole private airport for $430m

Canadian pension manager PSP Investments and a Mexican airport operator purchased Oaktree’s 50% interest.

Canada’s Public Sector Pension Investment Board has partnered with a Mexican airport operator to buy Oaktree Capital Management’s 50 percent stake in a Puerto Rican airport for $430 million.

The pension manager has taken a 40 percent stake in the holding company operating the Luis Muñoz Marín International Airport in San Juan, while Group Aeroportuario del Sureste (ASUR), which already held a 50 percent interest in the asset, purchased an additional 10 percent stake.

Highstar Capital, which was later purchased by Oaktree, bought a 40-year lease to manage the San Juan airport for $615 million in February 2013 and agreed to invest $1.2 billion over the lifetime of the concession.

Oaktree said it planned to sell the airport after enhancing the asset’s value.

“As a value-added infrastructure investor, we always seek to create sustainable, long-term organisations that can thrive well beyond our ownership,” Emmett McCann, a portfolio manager for Oaktree’s infrastructure business, said.

The Luis Muñoz Marin International Airport was the first – and so far only – airport sold through a Federal Aviation Administration pilot programme created to explore privatisation. In 2016, 99 million passengers went through the airport.

PSP Investments acquired its interest in the San Juan airport through its special purpose vehicle AviAlliance, which also owns stakes in four airports throughout Europe including Athens International, Budapest, Dusseldorf and Hamburg.

“This acquisition is an excellent fit with PSP Investments’ long-term investment philosophy and leverages the capabilities of AviAlliance, our airport platform,” PSP Investments’ infrastructure managing director Patrick Charbonneau said.

PSP Investments is one of Canada’s largest pension managers with C$125.8 billion ($93.43 billion; €83.56 billion) of net assets under management as of 30 September, 2016.