Private equity fund gets its Moto running

A New Zealand private equity fund has secured a 17.49 per cent stake in British motorway service operator Moto for £19.7 million ($51 million).

The Moto deal is only the second major investment by the Equity Partners Infrastructure Company, which was set up in 2007 with the backing of Macquarie Bank.

Back then it raised $95 million from the New Zealand public to invest in a 1.2 per cent stake in the UK's largest water and wastewater company, Thames Water.

Mick Carolan, managing director of Equity Partners Asset Management which manages the fund, said it had looked at more than 50 infrastructure investment opportunities since then.

"There were a number of issues around a lot of them - some were overpriced, others over-geared. We have a fairly strict criteria."

Carolan said Moto fitted that criteria because it had a strong, predictable and sustainable cash flow.

Moto provides 24/7 refuelling services, food, retail and parking at stops on Britain's motorway network. Carolan said the Moto business had a 38 per cent market share and sold 2 per cent of all petrol sold in Britain.

"It has a strong brand which has been performing well in spite of the UK's recession."

Carolan said it had negotiated for three months to buy the stake. He would not say who the seller was but described them as members of a consortium which originally acquired the company in 2006.

The other owners were mainly Australian pension funds, he said.

When Equity Partners launched, Macquarie talked of putting together a number of funds and listing them on the NZX.

But Carolan said the environment had changed dramatically in the last two years and it was taking a very careful approach to finding investments.

Equity Partners chairman George Kerr is also involved in the Queenstown development Jacks Point.