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Babcock & Brown Public Partnerships (BBPP) has agreed to buy a five per cent stake in Angel Trains UK, a railway rolling stock business, for £25 million. The deal, which is subject to regulatory approval, will complement BBPP’s existing investments in the rolling stock sector, including Reliance Rail in Australia and BeNEX in Germany.

The rail investment is being made through a newly formed company from Royal Bank of Scotland. The rolling stock company is part of a larger £3.6 billion acquisition, including Angel Trains International, in which BBPP is not investing.

As a core component of the UK’s transport strategy, the rail market is growing rapidly, and the acquisition will enable BBPP to participate in future government rolling stock procurement projects. Other shareholders include AMP Capital Investors, Deutsche Bank, funds advised by Access Capital Advisers and Babcock & Brown European Infrastructure fund.

Giles Frost, on behalf of Babcock & Brown Investment Management, said: “We expect this transaction to deliver additional strong and predictable infrastructure returns for BBPP. It will be immediately accretive to shareholders.

“Rail is a key public asset. This investment means that BBPP is well positioned to benefit from continued investment and growth in the UK rail market for which a current shortage of stock, high fuel prices and environmental concerns are just some of the key drivers.”

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