French alternative asset manager Tikehau Capital has entered into exclusive discussions to acquire US infrastructure developer and manager Star America Infrastructure Partners.
Both firms are betting on the US infrastructure market, which they describe as having “real long-term growth potential”.
“According to the Council on Foreign Relations, the United States only spent 2.4 percent of the GDP on infrastructure, while European countries spend 5 percent of their GDP,” the New York-based firm said in a statement. “In that respect, American government officials have recently signalled an intention to pursue investment plans which would reach about $2 trillion in order to upgrade and build infrastructures throughout the country.”
Should the deal go through, Tikehau Capital would be adding a new asset class to its business.
“Tikehau Capital will strengthen its expertise in infrastructure assets, beyond its recognised know-how in real estate,” the French firm’s spokeswoman Valérie Sueur, told Infrastructure Investor. “This transaction would allow the group to diversify its subsidiaries to a new growing asset class, as well as enhancing its geographic footprint in North America.”
Asked which infrastructure sectors Tikehau Capital plans to target through the acquisition, Sueur referred to the sectors in which Star America already invests, which include transportation, social infrastructure, as well as water, waste and energy efficiency. Some of the assets in Star America’s portfolio include the 40 kilometre-long South Fraser Perimeter Road outside of Vancouver, the under-construction Digital Crossroads Data Centre on the Illinois/Indiana border and student accommodation for the University of Texas at Dallas.
Star America, whose assets under management exceed $700 million, said it will continue to operate as a separate business within the Tikehau Group and that there would be no personnel changes.
In addition to real estate, the Tikehau Group also invests in private debt, private equity and fixed income. It has invested in many companies, mainly in Europe, such as French energy efficiency company Green Yellow and Spain’s national telecoms operator Aire Networks.
Neither firm disclosed further details about the deal, which has not been finalised. Star America did not respond to a request for comment.