London-based investor Ancala announced the formation of a U.S.-based short line rail specialist Phoenix Rail with its acquisition of Lehigh Valley Rail Management (LVRM) in Pennsylvania.
The company said it will now work with Phoenix’s management team of U.S. rail veterans to grow in what is says is a “highly fragmented market with significant opportunities.”
“We are thrilled to partner with Ancala to establish this railroad franchise,” Alex Yeros, CEO of Phoenix Rail, said. “We intend to leverage our industry experience to acquire, grow and enhance the platform across the United States. LVRM is an attractive initial investment with clear opportunities to build on customer and industry relationships, enhance services, and invest for growth.”
The transaction is Ancala’s second infrastructure investment in North America, following its investment in Noventa Energy in 2023.
The company said short line rail plays a critical transportation role for freight by connecting shippers to the U.S. national railroad network. The U.S. short line railroad industry generates $3.6 billion in revenues each year and continues to grow, officials said. Intermodal freight in particular has experienced high growth. According to the Association of American Railroads, as of November, intermodal volumes in 2024 increased 9.1 percent over the previous year.
“Short line rail in North America is a resilient and highly fragmented market with significant opportunities to grow,” Lee Mellor, a partner with Ancala, said. “Partnering with Alex and his proven management team is an exciting opportunity to deploy additional capital and build a significant rail business in the U.S.”