Napier Park Global Capital (“Napier Park”), a global alternative asset management firm, announced today that its Financial Partners team has held a final closing of Napier Park Railcar Lease Fund, LLC (the “Railcar Lease Fund” or the “Fund”), a $370 million specialized, single-purpose private equity fund, with an additional direct co-investment of $50 million from a Fund limited partner.
The Railcar Lease Fund has partnered with Trinity Industries, Inc. (NYSE:TRN), a diversified industrial company that includes as one of its principal businesses the manufacture and leasing of railcars, to create RIV 2013 Rail Holdings LLC (“RIV 2013”), a joint venture to invest in leased railcars. The Fund’s capital, along with a direct co-investment from a Fund limited partner and capital from Trinity Industries Leasing Company (“TILC”), a wholly-owned subsidiary of Trinity, was also used to recapitalize TRIP Rail Holdings LLC (“TRIP”), an existing joint venture that owns a pool of leased railcars. TILC provides servicing to both TRIP and RIV 2013. As of June 30, 2013, the combined entities owned a total portfolio of $1.5 billion of railcars on lease to industrial shippers and railroads. The combined portfolio is expected to grow to a railcar value of $2.0 billion by the end of 2014.
“We are excited about the opportunity to partner with Trinity Industries, a leader in railcar manufacturing and leasing,” said Jim O’Brien, co-managing partner of Napier Park Global Capital. “This investment is a clear example of Napier Park’s ability to identify and develop innovative, attractive investments for our clients. Along with our limited partners, we look forward to a long and mutually beneficial relationship with Trinity.”
The Fund’s limited partners include a number of leading U.S. life and property casualty insurance companies. The Fund, which was oversubscribed, now owns 48% of TRIP and 61% of RIV 2013.“We believe the railcar leasing industry provides a differentiated, durable and cash-yielding investment opportunity for our limited partners,” said Manu Rana, managing director, Napier Park Financial Partners. “We are investing alongside the U.S. railcar industry’s leading manufacturing-lessor, and our investment in a leading railcar lease fleet will benefit from structural shifts toward increased rail transportation.”