Australia’s IFM takes stake in UK airport operator

Stansted was put up for auction after the UK competition regulator forced BAA, which is owned by Spain's Ferrovial, to divest some of its assets. Other bidders are said to have included Macquarie and Malaysia Airport Holdings, while TPG Capital and New Zealand-based investor Morrison expressed an interest but didn't make formal offers.

MAG already owns two other British airports in addition to Manchester - East Midlands and Bournemouth - serving 24 million passengers and handling almost 500,000 tons freight every year. Passenger numbers and profit rose 6.7% and 26%, respectively, for the year ended March 2012.

MAG said the acquisition price represents a multiple of 15.6x Stansted's 2012 EBITDA, which compares favorably with similar airport transactions in the UK. The deal is expected to close by the end of February.

"As one of the largest airport operators in the UK, MAG has an outstanding track record of successful airport management," Kyle Mangini, IFM's global head of infrastructure, said in a statement. "IFM's equity stake in MAG furthers our strategy of investing in high-quality, core infrastructure assets."

IFM has been investing in airports since 1997 and holds significant interests in nine such facilities across Australia. These assets were worth more than A$1.8 billion as of September 2012.

IFM's total assets under management in private equity, listed equities, infrastructure and debt amount to more than A$39 billion ($41 billion). Of this sum, A$2 billion is invested in private equity and A$13 billion in infrastructure. MAG is the firm's 26th infrastructure investment globally - 18 of which are in Australia, three in North America and five in Europe.

While IFM's superannuation fund owners are able to participate in funds and co-investments, capital is already raised from third-party institutions. For example, California State Teachers' Retirement System (CalSTRS) committed $500 million to IFM's most recent global infrastructure fund, which principally targets assets in North America and Europe.

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