Investcorp Corsair Infrastructure Partners plans to deploy roughly USD 5bn in equity to mostly brownfield public-private partnerships (P3s) across airport, rail and other surface transportation assets over the next five years, executives told Infralogic.

That figure could reach about USD 20bn in total capitalization as the investor would undoubtedly tap financing as part of its quest to convince the public sector that certain assets are better developed and improved in private hands.

 ”The necessary capital expenditure in US transportation infrastructure both for the refurbishment of existing, severely aged assets and also for the creation of new assets … could be a trillion-dollar opportunity set,” Hari Rajan, managing partner of Investcorp Corsair, told Infralogic.

Investcorp Corsair views the P3 market as still in the early stages in the United States where private capital allocators continue to evolve how they own, operate and partner with the public sector on critical transportation assets.

From the Investcorp Corsair portfolio, “the airport sector has led the way and is leading the way … the level of innovation in public-private partnerships and the deployment of private capital and private sector operational skill has really been present more in airports than in any other sector and that’s a good thing because airports tend to be the more complex types of transportation assets,” Rajan said.

Additionally, the firm is exploring opportunities in rail, particularly high-speed rail. Investcorp Corsair’s investment platform, Vantage Group, operates the concession program at 30th Street Station in Philadelphia.

At some point soon, the firm will also look at P3 opportunities in the seaborne transport sector in the US.

“I do think there will be opportunities in US seaborne transport infrastructure as well but that’s probably a little bit later in the pipeline,” Rajan said. “This is specifically with respect to the US and our pipeline priorities.

“Seaborne transport infrastructure in the US is more exposed to cross-border trade between the US and its trading partners around the world, so would benefit from a settling of tariff policy. Air and surface transportation have significant support from the domestic movement of people and goods, so are more actionable in the near term.”

Separation of assets from state ownership

Unlike other countries, Rajan said that infrastructure is constructed and owned at the state and local level, so a private sector investor would typically partner with those entities.

One of the challenges in the US P3 market is deal flow as many localities across the country cling tightly to core infrastructure assets. A key challenge to unlocking investor opportunities is convincing local and state officials on the benefits of private investment.

As part of those efforts, in late May, Investcorp Corsair appointed Stephen K. Benjamin as operating partner for local communities. He will be responsible for leading Investcorp Corsair’s efforts in designing and assembling local investor consortia for P3 transactions in transportation and logistics infrastructure.

He will work closely with Investment Corsair’s investment platforms, in particular Vantage Group, where he will serve on the Board of Directors.

Benjamin served two years in the Biden Administration, as assistant and senior advisor to the President, and was city mayor of Columbia, South Carolina, for almost 12 years.

A knowledgeable private sector partner can be valuable in developing infrastructure, Benjamin said, as a mayor or county executive may have “thirty different things that he or she is thinking about at the same time.”

“When it comes to growing the nation’s P3 deal flow, it will be a matter of engaging in in-depth conversations with local and state officials on why certain assets will benefit from private sector capital and operational skill, in close partnership with the public sector,” Benjamin said. “Part of that will involve showing local officials the firm’s track record with public assets, as well as possessing intimate knowledge of a city or state’s specific needs and challenges.”

“I think for us the most important thing is the points of validation that we already have,” Rajan said. “If you look at what we’ve done with LaGuardia and JFK, in a major state and major city with a very sophisticated public sector counterparty, the Port Authority, I think that’s probably one of the most powerful things we have in our toolkit to say, ‘this is not conceptual, look at what we have already done and look at what benefits this has brought.'”