Trading in PPP equity has also led to the sale and acquisition of secondary market infrastructure funds. The first large-scale transaction was the sale of the Secondary Market Infrastructure Fund in 2007 with equity in 79 PPPs - see Appendix 2.
Some infrastructure funds have developed a corporate risk transfer strategy to transfer PPP equity to newly established listed or unlisted infrastructure funds. For example, Macquarie Group transferred the 50% of the equity in four US toll roads to a new unlisted fund, Macquarie Infrastructure Partners, whose investors are public and private pension funds, insurance companies, endowments and foundations and "…high-net worth clients" (Macquarie Group, 2007). Four years later it transferred the remaining 50% of the stake in these assets to Macquarie Atlas Roads, which was demerged from Macquarie Infrastructure Group and listed on the Australian Stock Exchange. A few months later, one of its projects, the South Bay Expressway in California, filed for bankruptcy. By this stage, equity was primarily owned by investors in Macquarie managed funds rather than Macquarie. In fact, Macquarie Capital Group Limited stake had been reduced to 16.25% (Macquarie Atlas Roads, 2012).
Demerging, the transfer of certain assets to a new company or infrastructure fund, is a method of raising new capital, transferring debt to the new company, transferring risk from the parent company to new investors, and gaining a profit. For example, in 2006 Macquarie Infrastructure Group (MIG) demerged its interests in three Australian toll roads to the Sydney Roads Group (SRG). MIG received A$125m in cash and shares in SRG. SRG assumed A$275m debt associated with the assets. MIG paid Macquarie Bank Limited A$4.5m advisory fee and A$1.1m of other transaction costs to Macquarie Equity Capital Markets Limited and UBS (Macquarie Infrastructure Group, 2006).
Five months later, Transurban Group made a successful takeover bid for SRG. Transurban already owned toll roads in Sydney and argued that it was the "natural owner" of SRG assets and "…only Transurban can unlock the value of an integrated network" electronic tolling, asset optimisation, lower costs and network enhancements (Transurban Group, 2006).
The value of PPP assets contributed to a number of takeovers of construction and infrastructure companies. They reflect the growing international ownership of PPP assets. For example, Citi Infrastructure Partners (Citigroup has a 15% stake) acquired ltinere, the highway operator owned by Spanish builder Sacyr Vallehermoso for US$10.2bn in 2008 The deal reduced Sacyr's debt by €5bn. Citi immediately sold toll roads in Spain and Chile to Abertis Infraestructuras (Spain) for €621m and other toll roads in Chile and Brazil to Atlantia (Italy) for €420m (Citi Alternative Investments, 2008).