The UK railway system, which was built over 200 years ago, is the oldest in the world. And even though the UK ranks only 23rd in terms of population, with approximately 1.6 billion journeys each year, it is the fifth most used in the world.
Apparently, the British like to travel by train. It should come as no surprise then that this is an interesting market for sophisticated investors.
In 2014, Allianz Capital Partners (ACP) acquired Porterbrook Rail Finance Limited, one of the three major rolling stock leasing companies in the UK. The acquisition was made together with three other international financial investors: one from Australia (Hastings), one from Canada (AIMCo) and one from France (EDF Invest).
Porterbrook owns and manages a modern fleet of more than 5,000 passenger and freight rolling stock, which it leases to train- and freight-operating companies in the UK under long-term lease agreements.
This fleet represents approximately one third of the UK's passenger rolling stock and Porterbrook is on course to further expand. Recently, the company agreed to purchase 108 new trains, which will be used on the Gatwick Express airport shuttle to London’s Victoria station from 2016 onwards.
Due to their long asset lives, underlying long-term leases and corresponding revenue stability, investments in rolling stock are an ideal match for the requirements of Allianz insurance companies with long-term liabilities.