Abu Dhabi’s Adia and US fund GIP to buy majority stake in European railcar lessor VTG

VTG has Europe’s largest privately owned fleet of more than 88,500 railcars

Established in 1976, Adia invests on behalf of the Abu Dhabi government. Stephen Lock / The National

A wholly owned subsidiary of the Abu Dhabi Investment Authority (Adia) and US-based fund Global Infrastructure Partners (GIP) agreed to jointly acquire a 72.55 per cent stake in German railcar lessor VTG Aktiengesellschaft.

Adia and GIP, an independent fund that invests in infrastructure assets globally, will hold an equal share of the stake in VTG, the entities said in a statement on Wednesday.

They will acquire the stake from funds managed by Morgan Stanley Infrastructure Partners and Joachim Herz Stiftung, which held shares of 57.55 per cent and 15 per cent in VTG, respectively.

The financial details of the transaction were not disclosed. Its completion is subject to customary closing conditions.

Hamburg-headquartered VTG is an international wagon hire and rail logistics company and has Europe’s largest privately owned fleet of more than 88,500 railcars.

“The growth of Europe’s rail freight market is backed by a modal shift to rail as a key enabler of the decarbonisation of supply chains,” said Khadem AlRemeithi, executive director of infrastructure department at Adia.

“This investment in VTG aligns with our continued focus on pursuing infrastructure opportunities backed by strong energy transition-related tailwinds,” he added.

Established in 1976, Adia, one of the world's biggest sovereign wealth funds, invests on behalf of the Abu Dhabi government. It makes direct and indirect investments across asset classes including equities, fixed income, infrastructure, private equity and real estate.

Last year, its subsidiary acquired a significant minority stake in digital infrastructure platform EdgePoint Infrastructure, committing to invest up to $500 million in the company.

VTG, which has a diversified fleet and pan-European operations, offers services across industrial, logistics and railway undertaking sectors. Its services also include rail logistics and repair and maintenance.

“We are excited by this investment and the opportunity to leverage GIP’s deep industry expertise in the rail sector to build on a market leading European transport infrastructure platform,” said Adebayo Ogunlesi, chairman and chief executive of GIP.

The acquisition is aligned with GIP’s energy transition and decarbonisation strategy “as the European rail sector is set to benefit from significant policy support as one of the most deliverable and cost effective near term decarbonisation levers available to governments for meeting net-zero targets in transport”, Mr Ogunlesi said.