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Goldman fund makes move on US ports(Lloyds List Via Thomson Dialog NewsEdge) GOLDMAN Sachs has revealed an ambitious long-term strategy of investing in the port terminal sector by taking a slice of the largest operator in the US. Goldman Sachs Infrastructure Partners, a $6.5bn fund started last year, has taken a 49% stake in Carrix, the Seattle parent of leading terminal operator SSA Marine. Details of the deal were not immediately revealed, but Lloyd's List has learnt that 'significant investments' in Carrix's future growth have been promised. A source familiar with the transaction said on condition of anonymity that the infrastructure fund visualised a much longer 'time horizon' for its investment than was common in financial circles. While he stopped short of revealing the fund's internal timeline for its investment, the source pointed out that another deal involving toll roads, in which the parent Goldman Sachs served an advisory role, had a lease of 99 years. The supposed handover of at least part of SSA Marine's strategic control to Goldman Sachs marks a watershed moment in the port terminal sector's fundamental realignment in the US. The deal continues the procession of financial and institutional investors entering the sector through well-heeled acquisitions of usually cash-strapped operations. Larger ships and growing trade are posing a fiscal challenge for US port authorities and terminal operators as they face increased dredging and infrastructure needs. This has fuelled an investment boom in the ports sector. However, many recent deals have brought forward new buyers, such as investment banks and pension funds, rather than the tried and trusted breed of terminal operators. The fact that some of these established companies are foreign state-owned enterprises, such as Dubai Ports World and PSA International of Singapore, could have something to do with this trend in today's political climate in the US. The SSA Marine deal leaves the US terminal market shared by public port authorities, some owned by shipping companies and these newer buyers. The deal follows AIG Global Investment Group's investment in Dubai Ports World's former US operations. AIG also took over MTC in San Francisco, adding the west coast to its portfolio. Goldman Sachs served as adviser in this transaction. Other notable recent port terminal deals involve the Ontario Teachers' Pension Plan's purchase of OOIL's port concession in New York, and Deutsche Bank investment arm RREEF Infrastructure's purchase of closely held Maher Terminals. In an interesting sidelight to the Carrix transaction, the founding Hemingway-Smith family has retained a majority stake and strategic control over Carrix. The Goldman Sachs source said this reflected the bank's honest admission that actual management experience could not be discounted in this cut-throat sector. According to an earlier announcement, GS Infrastructure Partners will seek investments in infrastructure sectors such as toll roads, airports and ports as well as regulated gas, water and electrical utilities. 'The combination of Carrix and Goldman Sachs' skills, networks and combined resources creates a formidable partnership and provides more opportunities for our employees,' said Carrix chief executive Jon Hemingway. Carrix is the parent company of SSA Marine, billed as the largest US-owned and privately held marine terminal operator in the world, and Tideworks Technology. Copyright 2007 Informa Maritime Trade and Transport , Source: The Financial Times Limited |