Fatal Machu Picchu Train Wreck Involves Units of LVMH, Carlyle

(Bloomberg) -- Global luxury conglomerate LVMH Moet Hennessy Louis Vuitton SE and one of the world’s biggest private equity firms, Carlyle Group Inc., hold stakes in train operators facing scrutiny after a fatal crash on a railway that ferries tourists to Machu Picchu.

The head-on collision on Tuesday killed one person, a train driver, and injured dozens more. The iconic tourist destination in Peru’s Andes mountains draws more than 1 million visitors every year. Many make the short journey from Cusco city or nearby towns in the region’s “Sacred Valley” by rail since the remote UNESCO heritage site can’t directly be accessed by road.

Paris-headquartered LVMH owns a stake in one of the train operators, PeruRail SA, through its investment in Belmond Ltd., a high-end hospitality and travel business that LVMH acquired in 2019. Belmond’s website advertises the trip to its affluent clientele in “finest luxury” wagons where they can “feast upon exquisite Peruvian cuisine, then venture to our vintage cocktail bar.”

Belmond also owns 50% of the company, Ferrocarril Transandino SA, that has the concession to operate the railway line along which the crash happened, according to a 2025 Ferrocarril Transandino business plan.

Representatives for LVMH and Belmond didn’t immediately respond to requests for comment.

The PeruRail train rammed into one operated by Inca Rail SA, where a Carlyle unit owns a majority stake. Carlyle has been trying to sell the stake via an asset manager that administers its Peru holdings.

Carlyle didn’t immediately respond to a request for comment. The asset manager, GRAM, declined to comment.

Carlyle entered the Peruvian rail tourism market about a decade ago, backing Inca Rail’s upgrades on the route between Sacred Valley towns and the foot of Machu Picchu, which winds along the Urubamba River and has narrow rights-of-way. The deal seemed to exemplify how global capital has become entwined with tourist outposts and their infrastructure connections.

PeruRail said in a Wednesday statement on its website that it evacuated 2,000 passengers in the early hours of the morning to a nearby town and had started to get its train service back up and running.

Inca Rail said in a Tuesday regulatory filing that it immediately implemented safety and emergency procedures after the collision and was coordinating with authorities to investigate the causes.

The incident at Peru’s top attraction comes at a time when the country’s tourism industry has been struggling to rebuild after the Covid-19 pandemic.

--With assistance from Preeti Singh and Jeannette Neumann.

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