Carlyle closes debut infrastructure fund on $1.15bn

The Carlyle Group has joined private equity’s race to deploy infrastructure-focussed capital with the close of its first such fund on $1.15 billion (€795 million).

Carlyle Infrastructure Partners will target transportation and water projects in the US and Canada, typically ranging in enterprise value from $100 million to more than $1 billion, the firm said.

Fourteen investment professional comprise Carlyle’s infrastructure group, which was established in March 2006 and is co-led by former Bechtel executive vice president Robert Dove, and Barry Gold, former managing director and co-head of the Structured Finance Group at Citigroup.

Dove estimates that US public infrastructure alone is in need of $1 trillion-worth of investment.

“The private sector has a role to play, as seen in Europe, and can be a proven means of helping to satisfy such dramatic funding needs,” he said in a statement.

The infrastructure fund announced its first deal in February with its agreement to buy Synagro Technologies, a US-based biosolids and organic residuals recycler, for about $772 million (€596 million). The transaction, which closed in April, included the assumption of $462 million in debt.

Carlyle is one of many private equity firms and investment banks entering – or ramping up their activities in – the infrastructure investing arena.

Last week, AIG Highstar Capital closed its third infrastructure fund on $3.5 billion – more than twice its target and four times the size of its predecessor – with 66 percent of its capital being committed by new investors. Goldman Sachs, JP Morgan and Morgan Stanley are also among those marketing infrastructure funds; in just the first six months of this year, fund placement advisor Probitas notes, $16.7 billion was raised for infrastructure funds – nearly matching the full amount raised last year, and more than three times the $5.2 billion raised in all of 2005.