Three investors join PSP in ‘Brexit-insulated’ Forth Ports investment

Patrick Samson, the Canadian pension's head of infrastructure, tells us he doesn't exclude some 'bumps related to Brexit', but is bullish on the long term, as GLIL Infrastructure, First State Super and Cbus join the deal.

Three investors are joining Canada’s Public Sector Pension Investment Board as new owners of UK-based Forth Ports, as the company seeks to ride out potential Brexit-related trade disruptions.

GLIL Infrastructure, based in London, along with Australian investors First State Super and Cbus have taken a minority stake in Forth Ports a week after PSP announced it would buy out an ownership interest from Arcus Infrastructure Partners. The Canadian investor will hold a controlling stake in the business, while the new investors will split a minority stake, according to Patrick Samson, PSP’s head of infrastructure.

In an interview with Infrastructure Investor, Samson declined to disclose the interest in Forth Ports that PSP now owns or the purchase price for the transaction.

In 2011, Arcus paid £760 million ($1.03 billion; €870 million) to buy the company, which owns eight commercial ports throughout the UK. A short time later, PSP acquired a 37 percent interest.

One of the ports in the portfolio, Tilbury, operates on the River Thames in London, while the others are spread throughout Scotland and include Grangemouth, the country’s largest container port. They are positioned to service trade needs, especially the growing offshore wind and North Sea oil and gas industries, according to a statement.

Samson said the company is insulated from potential trade disruptions that could result from a pending decision about the terms of the UK’s withdrawal from the European Union. He said clients that operate at Forth Ports are signed under a long-term contractual basis.

“With Brexit in the UK, the opportunity here comes from the challenge,” Samson said. “It’s possible there will be some bumps related to Brexit, but it will have very little effect over the long term.”

He added that part of the reason PSP sought full control of the company was to help navigate market complexities such as the impact of Brexit. “We prefer to control our own destiny,” Samson explained. He said PSP plans to implement an operational strategy that includes placing industry specialists on Forth Port’s governing board.

“We believe the Forth Port’s management team has the capacity to take this business to the next level, and we plan to assist with our asset management expertise,” Samson said.

PSP, which managed C$153 billion ($117.5 million; €101.9 million) in assets as of 31 March, owns one other port asset, DP World in Australia. However, Samson said Forth Ports will now be the investor’s main exposure to the sector.