UBS fund to acquire Spanish toll road

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UBS fund to acquire Spanish toll road

UBS Asset Management's UBS International Infrastructure Fund II has signed an agreement to acquire 100% of the equity interest in Autovía del Camino, a 72.4 kilometre concession road located in Northern Spain

The full equity interest is being acquired from RREEF Pan-European Infrastructure Fund LP, an infrastructure fund managed by Deutsche Alternative Asset Management.

The price of the acquisition is around €150 million. 
Autovía del Camino comprises a two-lane carriageway in each direction, connecting the northern Spanish cities of Pamplona, the capital of Navarra, and Logroño, the capital of La Rioja. 
Due to its strategic location, the road serves as an essential link for stable, commuter-based traffic between the two major cities of Northern Spain it connects, with no directly competing routes, allowing Autovía del Camino to maintain an enviable record of traffic performance since 2006, its first year of full operation. Autovía del Camino operates under a shadow toll regime which sees its tariff income for each vehicle that uses the road paid directly by the Regional Government of Navarra (the Authority).
Autovía del Camino represents the fourth investment completed by UBS International Infrastructure Fund II. The fund already owns interests in Western Generation Partners, a portfolio in the US and Trinidad of power generation plants, acquired in November 2016; Southern Water, a UK regulated water and wastewater company, acquired in May 2016 and; Axicom, an Australian mobile telecommunications towers business, acquired in May 2015.

The strategy of the fund is to invest on a long-term basis in diversified, core infrastructure assets in OECD countries. The Fund forms part of REPM’s global infrastructure platform, which has USD 6.6 billion of capital commitments for direct and indirect investments into infrastructure, through equity and debt, having significantly expanded in recent years in response to the strong appetite amongst investor clients for alternative asset classes which offer stable, long term cash flows.
The acquisition is envisaged to be funded by a mix of equity from the fund and a junior financing facility provided by a company affiliated with Brookfield Asset Management, Inc.  
Bronte Somes, Head of Infrastructure Equity Europe, REPM, says:

“This transaction complements our existing portfolio of direct equity investments and represents our first investment in Spain. Autovía del Camino is already a successful and well managed motorway that demonstrates the positive impact of attracting private investment into major infrastructure projects. We look forward to working in close coordination with the management and the local authority to ensure the asset’s further prosperity and continued operational success.”

Tommaso Albanese, Head of Infrastructure, REPM, adds:

“While investor demand for exposure to infrastructure continues to grow we remain vigilant to analysing opportunities in this space, ensuring that any potential investments provide a balanced risk profile combined with attractive returns. Autovía del Camino meets this criteria and represents a high quality addition to our portfolio, delivering long-term sustainable income steams for our clients in this current low-yield environment, whilst also standing out as a clear example of the sort of opportunities we can offer across REPM’s wide spectrum of investment strategies.”

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