Special Update - Fortress Infrastructure
High risk reward bet on US Infrastructure
Special Update - Fortress Infrastructure
Fortress Infrastructure ($FIP) is an energy infrastructure company born from the spin-off of its parent company, FTAI, in the summer of 2022, separating the Transport & Aviation Parts business from the Infrastructure business.
FIP’s business focuses on acquiring, developing, and operating critical energy infrastructure assets in the United States. Specifically, FIP owns four assets and has several minority investments.
As a reminder (you have the full analysis here):
Transtar, a railroad business with stable annual growth of 10–15%, acquired in July 2021, is the company’s main driver with nearly $100MM in EBITDA.
Long Ridge, a 505MW Power & Gas plant (with a 20MW upgrade in progress) located in Ohio, of which FIP acquired the 50% it didn’t already own this past February 27th.
Jefferson operates Gulf Coast port infrastructure, with a main terminal for liquid hydrocarbons and a South Terminal focused on chemicals like ammonia. It’s expanding under a 15-year blue ammonia contract and owns key logistics assets like 299 tank cars and pipeline rights.
Repauno, a New Jersey port and logistics hub focused on liquid fuels, with Phase I operational and expansion underway. Phase II, set for late 2026, is expected to add $70M in AEBITDA via secured contracts, with financing anticipated in 2Q25. Phase III is in early planning and could add ~$100M of EBITDA longer term.
Since going public, FIP has been completing the construction and ramp-up of its other assets, securing long-term stable contracts. It now expects to triple its EBITDA in the next 18 months to over $350MM while carrying out multiple financing cost reduction efforts (its current financing ranges from non-tax bonds at 1.99% to preferreds at 14%, which it is trying to eliminate).
Today, after publishing our initial Equity Research just two months ago, we review the results reported this Friday, update our spreadsheet, and share our conclusions on this company that has lost more than 50% of its market cap over the last 6 months.