B of I invests €100m in US infrastructure deal

Bank of Ireland Private Banking has invested €100 million on behalf of its clients in a US infrastructure private equity deal.

The bank said yesterday that it received a "huge response" from its client base to this investment opportunity, which was fully subscribed within a few weeks of being launched.

AIG Highstar Capital, which is managed by AIG Global Investment Corporation, was selected as the investment vehicle, and will target controlling or influential minority interests in sectors such as water, energy, transportation and waste management.

"We have targeted infrastructure opportunities as part of our ongoing expansion and diversification of our investment offering on behalf of private clients," said Peter Collins, director of property at Bank of Ireland Private Banking.

He said infrastructure represents a compelling investment opportunity because of its relatively stable nature as an asset class, and the increasing demand for better quality infrastructure assets. "It is estimated that there will be a need for $1.6 trillion in investments in US infrastructure opportunities up to 2010," he said.

"This is driven by structural changes in the infrastructure sector, such as increased privatisation and constraints on the use of public expenditures, coupled with growing demand."

It is expected that these factors will provide a significant flow of investment opportunities, and a greater reliance on private sector investment, according to Bank of Ireland. The bank says the investment is expected to generate superior private equity returns combined with the low-risk profile of infrastructure.

Bank of Ireland Private Banking has about €9 billion of assets and liabilities under management, with property representing almost €2 billion of the total.