PPP equity transactions

The ESSU Database records 281 UK equity transactions involving 716 PPP projects between 1998-2012, including multiple changes in ownership of some projects - see Table 4. The annual rate of PPP equity transactions increased rapidly between 2000-2004 during the formative years of the secondary market. There are inevitably variations in the annual rate of the number and total value of transactions, reflecting financial markets and attitude to PPPs, the rate of completion of PPP projects, recycling decisions of PPP contractors depending on their contract win-rates and the acquisition rates of secondary market funds seeking to expand their portfolios of assets. There may be more transactions that have not been captured in the database due to the opaqueness of secondary market transactions.

The financial crisis had a short-term impact on PPP equity transactions. The number and value of equity transactions declined in 2008, but rapidly returned to earlier levels a year later. The average value of PPP equity sold ranged from £3.4m in 2004 to £15.5m in 2012.

The estimated total value of PPP equity transactions is £5,123m between 1998-2012the (based on extrapolating financial data for 172 of the 279 transactions) - see Table 4. The estimated annual totals fluctuate year to year for the reasons cited above (note data for 2012 is for only 6 months).

Table 4: Annual rate and value of UK PPP equity transactions (1998-2012)

Year

No. of equity trans-actions

No. of PPP projects (includes those where equity sold more once)

Value of equity sold (£m) (No of transactions)

Estimated total value based on average (£m)

Estimated average value of equity sale per each PPP project

2012*

14

23

272.8 (11)

347.2

15.5

2011

35

107

388.6 (30)

440.4

4.1

2010

21

80

639.7 (17)

790.2

11.1

2009

29

66

377.4 (22)

514,6

7.8

2008

15

47

151.3 (9)

252.2

5.3

2007

22

68

405.6 (15)

594.9

9.0

2006

35

113

372.7 (22)

559.0

6.6

2005

42

58

342.2 (19)

756.4

13.0

2004

32

93

162.9 (14)

372.3

3.4

2003

17

31

134.6 (8)

286.0

9.0

2002

3

3

n/a

n/a

n/a

2001

7

18

117.4 (4)

205.4

10.4

2000

7

7

n/a

n/a

n/a

1999

1

1

n/a

n/a

n/a

1998

1

1

4.6 (1)

4.6

4.6

Total

281

716

3,369.8 (172)

5,123.2

7.5

Source: European Services Strategy Unit PPP Equity Database, 2012 * To 30 June 2012