Are rolling stocks about to go off the rails?
Andy Burnham’s pricey plans for nationalisation and greater public control of services have thrust Thames Water, housebuilders and the care sector under the microscope.
But while public attention has centred primarily on these British heavyweights, the process of bringing the UK’s passenger rail services back into state hands has chugged along quietly, leaving the question of rolling stock companies at the back of the carriages.
The deal could spark friction with some of the UK’s – and the world’s – biggest banks and investment firms, many of whom own huge shares in Britain’s rolling stock.
Rolling stock companies (ROSCOs), private firms that lease out trains for British railway, gained control and ownership of the UK’s passenger train fleets in the mid-1990s, following the privatisation of British Rail.
The ‘big three’ ROSCOs are Porterbrook, Angel Trains and Eversholt.
Investment banks to disembark?
The handing back of Britain’s railways has left analysts wondering how the investment banks and other institutional investors holding ROSCOs in their portfolios will react.
Unveiled by transport secretary Heidi Alexander at the Labour party conference last week, the government’s Rolling Stock and Infrastructure Strategy lays out the long-term roadmap for both investment and standardisation over the next three decades, building on plans introduced under Keir Starmer.
Crucially for ROSCOs it signals a fundamental shift in how future trains will be brought into commission.
German insurance giant Allianz holds a stake in Porterbrook alongside Royal London who owns Porterbrook stock through its acquisition of Dalmore Capital in November 2025 for £103m.
Canadian pension giant PSP has a 30 per cent stake in Angel Trains. Meanwhile Eversholt’s owner Beacon Rail was purchased by JPMorgan Chase for £855m in April 2017.
Analysts have raised concerns that this could lead banks to pull investment out of not just the railway but UK infrastructure more broadly.
Gerald Khoo, transport analyst at Panmure Liberum, said: “The likely shrinking of attractive, profitable opportunities to deploy capital will inevitably see it invested elsewhere.”
Dalmore Capital, JPMorgan Chase and PSP declined to comment. Royal London and Allianz did not respond to request for comment.
Full steam ahead
Great British Railways (GBR), the new publicly owned body created by Labour, will assess direct public ownership for new train orders on a case-by-case basis rather than defaulting to ROSCO leases.
GBR also plans to take control of manufacturing and maintenance and accelerate the replacement of diesel vehicles with battery-operated fleets.
An RMT spokesperson said: “The government’s new rolling stock strategy is a welcome recognition that the fragmented system of procurement and maintenance of our trains inherited from privatisation is basically broken.
“We welcome the news that GBR will look to standardise our fleets, buy its own new trains and do more maintenance in house but we urge the government to be bolder and move faster.”
The strategy is expected to bring about the end of ROSCOs’ near total-control on the leasing operation.
Other analysts have questioned if the decision will squeeze margins and returns as new capital will not be brought in, while ROSCOs may be expected to fund the refurbishment of fleets, leaving them investing capital without the opportunity of accumulating fresh profit.
ROSCO cash splash
The ‘big three’ ROSCOs have steadily been building their wealth since the 90s, leading rail unions to accuse them of raking in profits at the expense of passengers. Some analysts point to sustained improvements across the sector as evidence that the system was working well.
In the 2024/25 financial year, franchised passenger operators (OPR), including Avanti West Coast, Great Western Railway and East Midlands Railway, paid £2.7bn in leasing costs to ROSCOs, according to the Office of Rail and Road.
This represented 66.3 per cent of the total rolling stock expenditure, which amounts to roughly £4.1bn. The remaining £1.5bn went towards maintenance.
According to the latest figures from the firms, Angel Trains, Eversholt and Porterbrook paid out a record £390m in dividends to their shareholders in 2025.
The three company chief executives also pocketed a combined £3.4m between them, led by Porterbrook chief executive Mary Grant who received £1.4m.
This outstrips the salaries of both the bosses of Network Rail and HS2.
Crossroad for capital
The process to bring all Department for Transport contracted train ownerships into state hands is expected to be completed in 2027.
But Labour’s rolling stock strategy to overhaul the railway is anticipated to take 35 to 40 years, and major structural and financial questions hang over the fragmented system.
Similar to Burnham’s plans for Thames Water, he is yet to outline how the state will fund the backlog of upgrades and infrastructure repair without private capital, causing some to question if he will place the burden on taxpayers or hike fares.