Infrastructure Fund Set To Close At $2B

Highstar Capital will likely close its first fund since spinning out of AIG at around $2 billion next month, which would be $500 million short of its target, a source familiar with the fundraising effort told Buyouts.

Probitas Partners and PineBridge Securities LLC are helping the firm raise the capital. Buyouts reported last November that the firm had raised $1.1 billion for the fund, Highstar Capital IV LP.

Highstar Capital, which became independent in 2010, makes infrastructure investments globally in the areas of energy, environmental services and transportation. Since 2000, the firm has invested $5.6 billion and exited at least eight investments. The firm is led by Christopher Lee, an outspoken advocate of major infrastructure investing in the United States who has been involved with public-private partnerships in Asia, Latin America and the United States since the 1980s.

Infrastructure has gained popularity in the private equity industry in recent years, as cash-strapped governments increasingly looked to sell or partner with private equity funds to manage roads, bridges, tunnels and other infrastructure assets. The Carlyle Group and 3i Group plc were recently looking at Scotland’s Edinburgh Airport—which is owned by Britain’s BAA, whose shareholders include infrastructure specialist Alinda Capital Partners—but have since pulled out, while Global Infrastructure Partners LLC and JPMorgan Chase & Co.’s asset management are expected to submit final bids, Dow Jones reported on April 11.

Highstar’s portfolio includes Caiman Energy LLC, a company that helps gather and process natural gas in the Marcellus Shale; Advanced Disposal Services Inc., which comprises two waste management companies along the East Coast; and the Bayonne Marine Terminal, an owner of 94 acres of port-side property in Iselin, N.J.

Scott Litman, an executive with the firm, did not reply by deadline to requests for comment.