News / Goldman Sachs retreats from investment in Carrix while Mexican investor moves in

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Investment bank Goldman Sachs has pulled out of its investment in US container operator SSA Marine in what could be the first in a new round of ownership changes in the port sector.

The bank’s infrastructure private equity arm, Goldman Sachs Infrastructure Partners (GSIP), originally bought an undisclosed equity stake in SSA parent company Carrix in 2007, when investment in the port sector was at fever pitch and valuations were at record highs.

A concern called FRS Capital Corp later became the parent company of Carrix– which includes SSA and terminal operation software company Tideworks Marine – joining GSIP and the Smith/Hemmingway family as shareholders.

Yesterday however, Carrix announced that GSIP had sold its stake to the Smith/Hemmingway family.

It also said that to inject further capital, the family had then sold a 49% stake to Mexican businessman Fernando Chico Pardo.

While there has been no formal comment on the sale by GSIP, analysts believe it was a move likely to have been driven by the financial structure of the Goldman Sachs-controlled funds, rather than anything industry-related.

Neil Davidson, senior analyst – ports and terminals at Drewry, told The Loadstar: “As far as we know, Carrix is a profitable company – it’s certainly very well respected and very well run and ticks all the boxes from an owner’s point of view.

“So one would assume that there was a financial driver, in terms of funds reaching their maturity, and things simply having run their course.

“The likely financial mechanics of the original investment were that if it was possible for this investor to exit now, in terms of the level of price it could get, then it would do so. So one would assume that the price it has been paid was an expected return on the investment.”

The 2007 GSIP investment was made at a time when demand for US container port assets was at an all-time high in the investment community, with AIG Highstar Capital swooping for Ports America owner Marine Terminals Corp, and Deutsche Bank’s infrastructure investment arm RREEF topping the bill with a huge investment – in per teu terms – in New York’s Maher Terminals, prompting the question as to whether a new period of port investment may be on the way given that many of these prior investment may be reaching maturity.

“There are probably other instances where similar decisions are being weighed,” added Mr Davidson.

Carrix chairman Jon Hemingway said: “We’ve been fortunate the past seven years to work closely with one of the world’s leading investors in infrastructure and their fine people, but appreciate that, as with all investment funds representing an array of investors, they approach their investments with a need to invest, hold and then sell over a defined time frame.”

SSA Marine has various container and bulk operations in 210 ports across the world, mostly in the US and Latin America, but some in Asia and South Africa. Its current flagship developments are in Oakland, California, where it is spearheading the development of automated container handling technology in its yard, and in Panama, where it is expanding its facility on the Atlantic entrance to the canal.

Fernando Chico Pardo is the founder of Promecap, a Mexico City-headquartered financial investment company with stakes in infrastructure and other companies.

He said: “I am looking forward to joining the Smith/Hemingway family in supporting and advancing Carrix in its many activities.

“Carrix’s track record speaks for itself. We see a world-class portfolio of strategically well positioned terminals and other assets [which] will be the spring board for sustained future growth.”