Tikehau Capital has entered exclusive talks to buy Star America Infrastructure Partners, an asset management firm focused on developing and managing infrastructure projects in North America. No financial terms were disclosed.
Tikehau Capital is announcing today the entry into exclusive discussions to acquire Star America Infrastructure Partners, a US-based independent asset management company, active in the development and management of infrastructure projects in North America.
Founded in 2011 by two entrepreneurs, Star America specializes in medium-scale infrastructure projects, especially through public-private partnerships, in four asset types: transportation (roads, bridges, tunnels, rail in particular), social infrastructure (students and hospitals housing in particular), environment (water and waste management, energy efficiency) and communications (data centers, optical fiber). At the end of April 2020, Star America had over $600m (€550m) of assets under management and around 20 employees.
Tikehau Capital and Star America believe that the market for infrastructures in the U.S. holds real long-term growth potential. According to the Council on Foreign Relations, the United States only spent 2.4% of the GDP on infrastructure, while European countries spend 5% of their GDP. 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.
Thanks to the acquisition of a renowned player in the field of infrastructure asset management in the United States, Tikehau Capital would strengthen its expertise in infrastructure assets, beyond its recognized know-how in real estate. Thus, 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.
The proposed acquisition concerns 100% of the management company’s share capital. The full terms and conditions remain subject to discussion and the transaction, if and when signed, will be subject to closing conditions.
Mathieu Chabran, co-founder of Tikehau Capital, said: “This proposed acquisition of Star America Infrastructure Partners is a new step towards the development of Tikehau Capital in North America and will strengthen our expertise in the management of real estate and infrastructure assets. We are delighted to be able to consider this acquisition, in a sector with real growth potential, of a player with the same entrepreneurial DNA as Tikehau Capital and whose founding team will significantly strengthen the Group’s know-how.”
Bill Marino, co-founder, Managing Partner and Chief Executive Officer, and Christophe Petit, co-founder, Managing Partner and President of Star America, added: “Star America is delighted to join forces with such an impressive group like Tikehau Capital. Star America will add infrastructure and real assets as a new core competency to Tikehau Capital’s already stellar and global platform. Infrastructure and real assets are one of the fastest asset class in the asset management business and we look forward to contributing to Tikehau’s development plans in the space.”
Share buyback programme
On March 19, 2020, Tikehau Capital mandated an investment services provider for the repurchase of shares under its buyback programme authorised by the General (Shareholders’) Meeting of 22 May 2019, the renewal of which will be proposed at the General (Shareholders’) Meeting of 19 May 2020. The objectives of the repurchase are modified as of today so that the shares thus repurchased may then be used in the context of external growth, merger, spin-off or investment transactions, within the limit of 5% of the share capital in accordance with the law. The other terms of the share buyback programme remain unchanged.
The description of the share buyback programme (set out in section 8.3.4 of the Tikehau Capital Registration Document filed by the AMF (French Financial Markets Authority) on 14 April 2020 under number D. 20-0290) is available on the company’s website in the “Regulatory Information” section (https://www.tikehaucapital.com/en/shareholders/regulatory-information).
In a particularly uncertain market environment at the beginning of 2020, Tikehau Capital has a number of strengths that will enable it to continue to implement its strategy during the year, aiming at making the Group a leading and differentiated player in the alternative asset management sector in Europe.
Within each asset class in which it operates, the Group has chosen to position itself in thriving verticals which benefit from structurally favourable tailwinds, with for example, in private equity, energy transition, growth capital or cybersecurity.
Since 31 March, Tikehau Capital has continued to broaden and internationalise its customer base. As an example, the Group announced the launch, in partnership with Banca March in Spain, of a fund to offer its customers access to private markets in the energy transition sector, replicating Tikehau Capital’s private equity fund dedicated to energy transition (created in 2018 with Total SA). The fund’s strategy aims to offer high returns while providing equity to companies involved in accelerating the transition to a low-carbon economy. In the second quarter, the Group also launched a second fundraising campaign among Banca Fideuram’s private customers, following on from the first campaign finalised at the end of 2019.
The Group also continues to innovate, to adapt to the market, and to offer its investor-clients a variety of investment solutions with complementary characteristics. Some of them are even more relevant in the context of a cyclical downturn, such as the second generation of special situation funds, or the first secondary private debt fund. Tikehau Capital is indeed convinced that after several years of strong growth in the primary private debt market, a secondary market for this asset class is bound to develop, in particularly against the current backdrop.
Over the coming quarters, the Group will also remain active with the confirmed launch of its fifth generation of direct lending fund, which will begin to be marketed in the second quarter, and the extension by six months, until the end of December 2020, of the fundraising period for the private equity fund dedicated to energy transition.
Finally, on 6 April 2020, Tikehau Capital and City Developments Limited (CDL), a leading real estate company listed in Singapore, announced the increase of their respective stakes in IREIT Global, a Singapore-listed real estate investment trust focused on the European real estate market, in which Tikehau Capital invested in November 2016. This acquisition, which brings Tikehau Capital’s stake in IREIT Global to 29.2%, was completed on very good financial terms for the Group, as IREIT Global’s share price increased by +37% since the transaction.
Tikehau Capital relies on a differentiating business model, based on significant shareholders’ equity, invested primarily in its various asset management strategies, alongside its investor-clients. In addition to ensuring an unparalleled alignment of interests between the Group and its investor-clients, this approach allows Tikehau Capital to be well equipped to deal with adverse market conditions.
Tikehau Capital thus confirms its objectives for 2022 targeting more than €35 billion in assets under management for the Group and generating more than €100 million in net operating profit from asset management activities.