Former AIG Infrastructure Group Seeks $3.5B

Highstar Capital has raised $750 million so far for its fourth infrastructure fund, according to a source with knowledge of the firm’s fundraising campaign. The firm is looking to raise $3.5 billion altogether for Highstar Capital IV LP.

Probitas Partners, the San Francisco-based placement agency, and PineBridge Securities LLC, are helping the firm raise the fund.

New York-based Highstar, a former subsidiary of American International Group known as AIG Highstar, raised $3.5 billion its third fund in 2007.

Highstar divides its infrastructure investments into three main categories: energy, such as natural gas pipelines and storage facilities, power generation facilities or electricity transmission networks; environmental services, such as waste management and water utility investments; and transportation, such as ports, airports, logistics companies and other service providers.

The firm’s portfolio includes Kinder Morgan Inc., the Houston-based pipeline transportation and storage company; Utilities Inc., a Northbrook, Ill.-based water and waste water utility serving around 305,000 customers; and AMPORTS Companies, a Jacksonville, Fla.-based port-side processor of cars and other vehicles for import, export and domestic distribution in the U.S. and Mexico.

Highstar targets deals in North America and Europe, and generally uses its companies as platforms for add-on acquisitions. Its portfolio company Ports America Companies, for example, includes three acquisitions: Ports America Inc., a maritime terminal operator; MTC Holdings, a provider of terminal operations services to container shipping companies at 32 locations on the West Coast; and Ports America Outer Harbor LLC, a marine terminal operator in Oakland, Calif. The firm’s last major new investment came in October 2008, when it bought a 25 percent stake in London City Airport, a niche airport that primarily serves the London business passenger market.

Highstar has invested $5.2 billion in 18 deals since its formation in 2000, according to the firm’s Web site. Since then, the firm has had eight realizations.

Executives at the firm did not return a call requesting comment.