STAR Capital sells Secondary Market Infrastructure Fund for £927m

STAR Capital Partners has sold its 22 asset-strong Secondary Market Infrastructure Fund to a property outsourcing group for £927 million in its first exit since November.

STAR Capital Partners, an independent investment fund manager and its co-investors, HBoS and AMP Capital Investors, an Australian investment manager, will sell Secondary Market Infrastructure Fund to Land Securities Trillium, a UK property outsourcing group, for £927 million (€1.38 billion; $1.82 billion). 

STAR bought Secondary Market Infrastructure Fund, a European infrastructure investment and management group, in December 2003 for an undisclosed sum. 

The fund, which has twenty two portfolio assets, provides liquidity to infrastructure project investors and developers in the UK and European private finance initiative and public private partnership markets. 

HBoS and AMP joined STAR as co-investment partners during 2005 to further the fund’s growth.   

Tony Mallin, chief executive officer of STAR, said: “When we started, the fund was a very high-risk venture because we could not justify the overheads needed to expand the business but we became the biggest player in the fund’s market.”

On the timing of the sale, Mallin said the fund needed to move to the next stage of its development and to do this it needed more critical mass. 

He said, “The market has now recognised the long-term sustainable cash flows backed by quality contracts with government entities.”

The sale is STAR’s first exit since November when it sold BUS Group, a metal recycling business, to Spanish waste company Befesa for €330 million.

STAR is a European specialist investment fund with more than €1 billion of equity under management.  STAR is currently investing its second fund in businesses valued up to €1 billion.  STAR focuses on the transportation, energy, oil and gas, utilities, industrial installations, telecommunications and healthcare sectors.