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UK's USS expands stake in Sydney rail line

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The Universities Superannuation Scheme (USS) has grown its stake in an Australian railway line, buying a nearly 50% share from a local infrastructure fund.

The Westpac Essential Services Trust, managed by the AUD7bn (€4.6bn) Hastings Funds Management, parted with its 49.9% stake in Airport Link Company (ALC).

ALC is responsible for running the railway between the centre of Sydney and the city’s international airport, with USS already owning a stake in the company.

Local infrastructure manager CP2, a part owner of ALC, will continue to manage the asset on behalf of USS.

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Gavin Merchant, senior investment manager at USS Investment Management, said: “The investment forms part of USS’s infrastructure portfolio and builds on a long track record of investing in high-quality Australian infrastructure assets including Connect East and Brisbane Airtrain.”

According to its most recent annual report, covering the year to 31 March, USS had £1.1bn (€1.3bn) – or 3.6% of its £36.6bn in assets – invested in infrastructure.

However, since then, the fund has bought a nearly 50% stake in UK air traffic control business NATS and invested £400m in Heathrow Airport.

USS late last year also acquired a AUD110m stake in the trail line between Australian state capital Brisbane and its airport, and has offered debt financing to companies in the water utilities sector. 

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