On the Right Track: Infra Funds Fuel Rail M&A Revival
A niche once tied to industrial decline is delivering stable, scalable returns — and a new wave of M&A momentum.
Hopping on a freight conjures images of hard times, but infrastructure funds have found steady returns by acquiring short-line railroads. Deals tend to be slow-but-steady, and there are plenty of targets. Of the 610 short lines in the U.S., according to the American Shortline Association, roughly two-thirds are independent.
Railroad M&A has been in the spotlight, but for large-cap theses rather than actual middle-market transactions. In July, Union Pacific agreed to acquire Norfolk Southern. That plan to create a single transcontinental railroad faces considerable shipper opposition and regulatory scrutiny.
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