Bank of Ireland Private Banking raises €100m for US Infrastructure Private equity deal

- first infrastructure opportunity for Private Clients

Bank of Ireland Private Banking today (10 August 2007) announced that it has invested €100 million on behalf of its clients in a new US Infrastructure Private Equity deal. The investment vehicle, AIG Highstar Capital, invests in entities that provide essential infrastructure services and products such as water, energy, transportation and waste management within the US and worldwide.

AIG Highstar Capital is managed by AIG Global Investment Corp., a subsidiary of American International Group, Inc. the world's leading international insurance organisation with operations in more than 130 countries and assets of approximately $900 billion.

Peter Collins, Director of Property, Bank of Ireland Private Banking commenting on the rationale behind investing in infrastructure said: "We have targeted infrastructure opportunities as part of our on-going expansion and diversification of our investment offering on behalf of private clients. This is due to the relatively stable nature of infrastructure as an asset class coupled with increasing demand for more and improved quality of infrastructure assets, which to us represents a compelling investment opportunity. It is estimated that there will be a need for US$1.6 trillion in investments in US infrastructure opportunities up to 2010. This is driven by structural changes in the infrastructure sector, such as increased privatisations and constraints on the use of public expenditures, coupled with growing demand. These factors will provide a significant and sustainable flow of investment opportunities and an increased reliance on private sector investment.

The investment vehicle, AIG Highstar Capital, will target controlling or influential minority investments in the water, energy, transportation and waste management sectors. Investment in these sectors often have limited exposure to economic cyclicality, resulting in an asset class that, when managed proactively, is capable of generating superior private equity returns, while exhibiting relatively low volatility and providing downside protection.

Commenting on the selection of AIG Highstar Capital, Peter Collins stated: "We are particularly pleased to work with an organisation of the calibre of AIG Inc. and specifically with the Highstar management team. They have led or co-led approximately $12 billion in transactions based on enterprise value and generated an aggregate of 38% gross internal rate of return on their realised investments. This highly specialised team is lead by four investment partners who between them have over 100 years of experience within the infrastructure-private equity arena."

"AIG Highstar Capital, is the third in a series which has a six year track record in successful infrastructure investing and the attractiveness of this model is that it is anticipated to provide superior private equity returns with the low risk profile of infrastructure. We have had a huge response from our clients to this investment opportunity with all investment slots filled within a few weeks of launch", added Peter Collins.

Ends

Contact:
Anne Mathews
Media Relations Manager
Tel: 01 604 3836 or 087 246 0358

Kevin Quinn
Private Banking
Tel: 01 637 8694 or 087 283 3240

Note to editors:
About Bank of Ireland Private Banking Limited
Bank of Ireland Private Banking has approximately €9 billion of assets & liabilities under management, with property accounting for almost €2 billion of the total. In addition to this latest acquisition, it has invested in prime commercial property markets including the UK, Belgium, France, The Netherlands, Sweden, Asia (South Korea) and the US. The Bank's portfolio of properties was returning 25% annualised returns from inception as of end of June 2007.

Infrastructure as a compelling investment opportunity
Infrastructure investment strategies involve investments in businesses and assets that own and/or operate the physical structures and networks used to provide essential services to society. At its core, infrastructure facilitates the growth of businesses, promotes trade and enhances economic welfare by improving access to vital resources.

Infrastructure assets are often regulated monopolies and consumer demand for their services is typically price inelastic. The sector is generally characterised by reasonably predictable revenue and cash-flows, substantial physical assets, varying degrees of government regulation, high barriers to entry and in certain instances, inflation linked cash flows paid on an availability basis. The sector's relatively low volatility and lack of correlation with other classes of private equity make it an important component of any diversified private equity portfolio.

Infrastructure assets typically have unique characteristics that provide a distinctive risk/return profile. Key characteristics include their long life asset profile, low return volatility, scale, high credit quality of revenues, protections against inflation, long term income streams and low cyclicality.

Infrastructure constitutes an essential building block of any economy and in a country such as the US the future demand for services such as water, energy and waste management will continue to expand. Properly constructed, an Infrastructure investment vehicle has the potential to generate outstanding returns.

TAIG Highstar Capital Legal Disclaimer:
None of Highstar III, its general partner and its manager or their respective affiliates has participated in the preparation of this document or made any representations with respect to the information contained herein, and each of Highstar III, its general partner and its manager and their respective affiliates expressly disclaims any responsibility with respect to the adequacy, sufficiency or accuracy of the information included in this document.