The AIG Highstar Team believes that infrastructure businesses and assets are a compelling asset class where Highstar can earn superior private equity returns.  In particular, energy, transportation, waste management and water, sectors in which Highstar has successfully invested capital, are likely to remain very attractive investment opportunities.

Bank of Ireland Private Banking today announced that it has invested €100 million on behalf of its clients in a new US Infrastructure Private Equity deal.

The investment vehicle, AIG Highstar Capital, invests in entities that provide essential infrastructure services and products such as water, energy, transportation and waste management within the US and worldwide.
 
AIG Highstar Capital is managed by AIG Global Investment Corp., a subsidiary of American International Group, Inc. the world’s leading international insurance organisation with operations in more than 130 countries and assets of approximately $900 billion. 
 
Peter Collins, Director of Property, Bank of Ireland Private Banking commenting on the rationale behind investing in infrastructure said: “We have targeted infrastructure opportunities as part of our on-going expansion and diversification of our investment offering on behalf of private clients. This is due to the relatively stable nature of infrastructure as an asset class coupled with increasing demand for more and improved quality of infrastructure assets, which to us represents a compelling investment opportunity.

It is estimated that there will be a need for US$1.6 trillion in investments in US infrastructure opportunities up to 2010. This is driven by structural changes in the infrastructure sector, such as increased privatisations and constraints on the use of public expenditures, coupled with growing demand. These factors will provide a significant and sustainable flow of investment opportunities and an increased reliance on private sector investment.”
 
The investment vehicle, AIG Highstar Capital, will target controlling or influential minority investments in the water, energy, transportation and waste management sectors. Investment in these sectors often have limited exposure to economic cyclicality, resulting in an asset class that, when managed proactively, is capable of generating superior private equity returns, while exhibiting relatively low volatility and providing downside protection.
 
Commenting on the selection of AIG Highstar Capital, Peter Collins stated: “We are particularly pleased to work with an organisation of the calibre of AIG Inc. and specifically with the Highstar management team. They have led or co-led approximately $12 billion in transactions based on enterprise value and generated an aggregate of 38% gross internal rate of return on their realised investments. This highly specialised team is lead by four investment partners who between them have over 100 years of experience within the infrastructure-private equity arena.” 
 
“AIG Highstar Capital, is the third in a series which has a six year track record in successful infrastructure investing and the attractiveness of this model is that it is anticipated to provide superior private equity returns with the low risk profile of infrastructure. We have had a huge response from our clients to this investment opportunity with all investment slots filled within a few weeks of launch”, added Collins.