LambdaStar Infrastructure Partners, a fund operator that came to prominence for its long-running and, in the end, unsuccessful pursuit of a public-private parking deal with Harrisburg, Pennsylvania., is out of business.
Infrastructure Investor could not determine when LambdaStar, which was based in New York, closed.
Reached via email, LambdaStar founder Leonard Shykin revealed he was in China, but did not provide further detail about the demise of his fund company. Jacob Frydman, credited with starting LambdaStar with Shykin and chief executive of United Realty Partners, could not be reached for comment. Stephane Azoulay, who joined LambdaStar in 2009 from Macquarie Group, is now a graduate student at Harvard University.
LambdaStar appeared in 2008, boasting pedigree in Chicago native Shykin, 68, who helped Citicorp build out its private equity and venture capital business, and Frydman, 55, a real estate developer. Its debut offering, a “middle-market…core and value-added” fund, had set out to raise $1.5 billion.
Though LambdaStar expected to invest 20 percent of its capital in ‘greenfield’ infrastructure, the fund was focused on “’true’ infrastructure…acquired from either a public sector or private counterparty primarily in transportation,” and its debut bid – a 2008 grab for municipal parking in Harrisburg – both heralded LambdaStar's arrival while illustrating the danger inherent to partnering private capital with public infrastructure in the US.
Fiscally strapped Harrisburg had agreed to lease its garage and on-street parking to LambdaStar. The deal, $215 million for a 75-year lease, seemed good-to-go – but died in the legislature. In the US, the abortive concession would signal a wider backlash against parking privatisation.
For LambdaStar, the collapse of the Harrisburg parking deal would portend coming disappointment: the fund bid on a similar parking public-private partnership (PPP; P3) in Pittsburgh, but was not shortlisted, and in addition watched erstwhile concession partner LAZ switch allegiance to eventual preferred bidder JPMorgan Chase.
Then in 2010, LambdaStar joined with EQT Infrastructure Partners to offer Harrisburg $140 million to lease its waste incinerator on the condition Harrisburg would also lease LambdaStar and EQT its parking. But a deal failed to materialise, and Harrisburg was put into state-appointed receivership in 2011.