The amount of private equity investment in Europe's transport sector reached a new peak in 2021 and remains strong in 2022, as investors bet on the industry's pandemic recovery.

The commercial transportation sector was hit hard by the COVID-19 outbreak as lockdowns suspended daily commutes and other forms of business and leisure travel.  

PitchBook data shows that while the number of commercial transport deals fell slightly in 2021, deal value picked up as PE investors targeted prize assets divested by often beleaguered parent companies.

Among them was the sale of Ermewa Group, a French provider of freight railcar leasing, to DWS Group and Caisse de dépôt et placement du Québec in October for roughly €2.5 billion (about $2.6 billion), according to a PitchBook estimate. The divestment went toward shoring up the finances of its parent, the state-owned rail group SNCF, which had reportedly been badly impacted by the decline in traffic due to the pandemic.

Notwithstanding the wave of industrial action by rail unions such as the RMT, PE investors have also looked to train and bus operators in the UK, lured by the potential for inflation-linked revenue secured by government contracts.

In June, London-listed Go-Ahead Group reportedly accepted a £650 million takeover bid from a consortium backed by Canadian pension manager OPTrust.

Some deals in the sector have struggled to close. I Squared Capital's £1.2 billion takeover offer for UK rail and bus operator FirstGroup was rebuffed just last month, according to reports.

Featured image by Tim E White/Getty Images

This article originally appeared on PitchBook News