UBS to use Brookfield debt in Spanish road deal

The firm’s fourth investment from its second flagship vehicle will provide an exit to Deutsche AM, which bought Autovía del Camino in 2010.

UBS Asset Management has agreed to buy 100 percent of Autovía del Camino, a 72.4km concession road located in Northern Spain.

The Swiss firm will buy the asset from the $2.1 billion RREEF Pan-European Infrastructure Fund, a vehicle managed by Deutsche Alternative Asset Management which originally acquired the road in 2010.

No value was disclosed for the transaction. UBS declined to comment on pricing, while Deutsche AM did not respond to a request for comment before press time.

UBS will seal the deal using its International Infrastructure Fund II, a $644 million vehicle closed in 2015 for which the firm originally had a $2 billion target.

The firm said it expected to fund the acquisition with a mix of equity and junior debt, the latter “provided by a company affiliated with Brookfield Asset Management”. Brookfield did not respond to a request for comment regarding which company was likely to take part.

Autovía del Camino operates under a shadow toll regime which sees the regional government of Navarre pay a tariff for each vehicle that uses the road. The asset posted an average annual traffic of 12,416 vehicles and revenue of about €39 million in 2016, a spokesperson for UBS told Infrastructure Investor.

The deal marks UBS IIF II’s fourth deal. The vehicle had previously backed a portfolio of US and Trinidadian power generation plants and UK utility Southern Water, both in 2016, and Axicom, an Australian mobile towers business, in 2015.

The transaction comes after the firm combined its direct real estate and infrastructure platforms, its indirect multi-manager real estate, infrastructure and private equity businesses, and its infrastructure debt offering in January to form Real Estate & Private Markets, a unit with $90 billion under management.