Monday, June 8, 2009

PE Insiders Are Piling Into Infrastructure

A new gusher of money for insiders now appears to be wide open.

Private equity firms are following in the footsteps of the investment units at Goldman Sachs, JPMorgan and Morgan Stanley.

According to Pensions & Investments, they are shifting gears to focus on infrastructure investing. P&I adds that right now some of the biggest names in the private equity field — Carlyle Group, Kohlberg Kravis Roberts and Blackstone Group — are raising infrastructure funds.

Between $120 billion and $170 billion has been raised by global infrastructure funds over the past two years, according to P&I, citing Ernst & Young estimates.

Carlyle raised a $1 billion fund last year, according to P&I. The firm also partnered with Riverstone Group, closing two funds in 2007 with a combined $4.5 billion for energy-related infrastructure. KKR also started its global infrastructure investment business in May 2008. P&I adds the firm is seeking to raise $4 billion for the KKR Infrastructure Fund.

P&I says Blackstone is marketing its first infrastructure fund, Blackstone Infrastructure Partners, they hope to raise $3 billion to $5 billion. Also Neuberger Berman Group LLC,, restarted the infrastructure investment unit that former parent Lehman Brothers started building before they went bankrupt last September. George Bush's cousin now runs Neuberger.

Representative Rosa DeLauro, (D-CT) recently introduced a bill to establish a national infrastructure development bank that would use public and private capital to fund projects at the regional and national level. The bill has 27 Democratic co-sponsors in the House, along with a lot of the usual suspects circling Obama. Transportation Secretary Ray LaHood has already voiced his support for the bank. It has also won the support of the AFL-CIO. Even the U.S. Chamber of Commerce is getting in on the act and is endorsing the bill.

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