UBS AM makes first foray into Portugal, fully deploying AIIF II

UBS Asset Management’s Real Estate and Private Markets business has acquired a 100 percent stake in Gascan, Portugal’s second-largest distributor and supplier of piped liquefied petroleum gas, from Spanish mid-market private equity firm Arta Capital.

The deal represents the first investment in the country and the LPG sector UBS is making through its infrastructure equity platform. While the Swiss firm did not disclose financial details, the sales price was reported to be between €100 million and €120 million.

The investment is being made through Archmore International Infrastructure Fund II, a $643.8 million vehicle, which has now been fully deployed. The manager will follow the latter with a third equity vehicle, said to be targeting about $1 billion. UBS refused to comment on the fundraising.

“The asset will deliver stable and attractive cashflows,” Bronte Somes, head of infrastructure equity Europe, REPM, said in a statement. “It also proves our capability to execute transactions on a bilateral basis in the infrastructure mid-market segment,” she added.

The transaction, which closed on 6 February, “was completed on an exclusive basis after an unsolicited approach to the Spanish private equity fund Arta Capital,” the firm said.

In addition to being a proprietary deal, the transaction also falls in line with other goals UBS head of infrastructure Tommaso Albanese outlined in an interview last month. They include: a focus on complex mid-market transactions; investor-friendly structures; and traditional infrastructure assets – elements that have paid off for UBS’s debt strategy.
He also said that, going forward, the firm’s equity strategy would entail seeking either majority positions or be one of the largest investors in any given asset. “We want to get involved in the management of the assets,” he said at the time. “For example, I have set up a team of advisors – people with experience in managing infrastructure companies – that can help us with the asset management.”

For Gascan specifically, the strategy will be to grow the company both organically through additional pipeline connections but also through acquiring other smaller networks “and taking advantage of a highly fragmented piped LPG market in Portugal”, according to the statement.

Currently, Gascan distributes and supplies piped LPG to more than 65,000 customers throughout Portugal, distributing more than 11,000 tons of gas per year, with a pipeline network of over 760km and around 2,050 tanks. The majority of its customer base is residential, but EnergyCo, a thermal energy supply business which Gascan also operates serves commercial customers.