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König & Cie. actively pursues investment opportunities in the West-European rail sector. Our focus is on rolling stock in the segments freight engines and light rail / commuter trains. This asset class offers long term secure cash flow patterns as in main instances lessees are government entities or government backed. König & Cie. possess the unique combination of in depth market knowledge, technical expertise and significant experience in financial struc- turing and private equity. This combination enables König & Cie. to source proprietary deals and to ensure a technical asset man- agement that ensures that the value of the vehicles is maintained over the fund life time. Freight EnginesIn 1997 the European Union started the liberalization in the West-European railway freight market. Since then, private operators have been entering this market, which was previously exclusively dominated by national railways. The operators need freight engines both as shunters as well as for cross border long distance. |
In addition the market for freight engines is driven by replacement need of (former) state railways as the average age of European rolling stock is 30 years plus. The typical transaction is a multiyear financing or leasing contract. Light Rail / Commuter TrainsTypically regional passenger transport is organized by regional or municipal govern- ments throughout Western Europe. Each country is divided into regional networks that comprise single or multiple lines. The operation of those networks is usually awarded to operating companies with contract length varying between 5 and 15 years. These operators need financing for the vehicles to be deployed in the networks. Again, the cash flows are long term, very steady and at least partly government backed. König & Cie. believes that rail assets currently offer very favourable terms and secure cash flow patterns for investors. |
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