A new firm focused on investing in infrastructure needs across the country launched this week with former Mayor and U.S. Secretary of Housing and Urban Development Henry Cisneros at the helm.
American Triple I – short-hand for infrastructure, innovation, and investment – will deploy private-equity capital to build or improve transportation, knowledge and information systems, and smart-city projects. San Antonio could see some of those investment dollars as well, except when it comes to transportation.
Cisneros, a veteran private-equity investor, will serve as chairman and co-chief investment officer of Triple I, an affiliate of Siebert Cisneros Shank (SCS), a firm led by Suzanne Shank who will serve as an owner and member of Triple I’s executive committee. David Cibrian was named CEO and co-chief investment officer of American Triple I.
Cisneros said Wednesday the firm will also give him the first opportunity he has had to work closely with his 31-year-old son, John Paul Cisneros, whose education and career – like his father’s – has focused largely on public finance, private equity, and urban development.
As an infrastructure investment firm, Triple I is one of a growing number of such firms designed to generate returns for private investors in infrastructure, and in the United States at least, a new way of doing infrastructure without relying solely on public funds. The largest such firms in the U.S. include Blackstone, Global Infrastructure Partners, and JPMorgan.
“There are many global infrastructure advisers only pursuing massive projects: acquiring entire energy systems or attempting to monetize toll roads,” Cibrian stated. “By contrast, American Triple I will look to thousands of U.S. communities seeking private capital for mid-sized infrastructure solutions.”
Investors that typically seek to capitalize infrastructure include pension systems, insurance companies, high-net-worth individuals, private wealth management advisory firms, university endowments – groups that are seeking lower returns over a longer period of time, greater reliability, and less risk, Cisneros said.
“Increasingly, there’s recognition that the private sector can take some of the load that would otherwise be purely on a public entity when they don’t have the debt capacity – there are statutory limitations [as well as] debt, financial, and economic limitations on what local governments can do,” Cisneros said.
“The infrastructure needs are now increasing because we’ve allowed our infrastructure to slip into decline. Congestion is a result, and the deterioration of roadways. Power grids have failed. Water systems have serious issues, such as what we saw in Flint [Michigan].”
Population growth also has contributed to the deterioration of infrastructure, he added, especially in Texas, even as technology is driving the need for different solutions in areas such as mobility and energy.
Thus, Triple I will invest in projects that require $25 million to $50 million in capital that are located within the United States. That could include money for roads, water and power systems that support renewable energy, information systems, and airport and seaport modernization.
But the firm will not invest in transportation initiatives within Cisneros’ hometown because he is serving as one of three chairs of ConnectSA, the city’s first comprehensive transportation plan, and wants to avoid any appearance of conflicts of interest.
“Because in my volunteer role right now at ConnectSA, I want to help create a plan for San Antonio without anybody questioning whether I’m doing it because I want to be involved in the projects that come about as a result of this,” he said.
“Triple I will not invest in projects related to ConnectSA, unless at some point in the distant future there are competitive projects. I don’t want anybody to think I would use any access to information related to planning or inside information of any kind to get an advantage and have some sole track to a favorable decision.”
As a ConnectSA chair, Cisneros presented a proposed framework for a multimodal transportation plan in December. It calls for an estimated $1.3 billion in additional funding for projects and initiatives through 2025 and an additional $1.4 billion through 2030.
Cisneros told the Rivard Report that the decision not to invest in San Antonio’s transportation initiatives is “a big commitment,” given he would like to work here, but that it is the right thing to do. However, Triple I could invest in other types of infrastructure projects located in San Antonio, he said, and the firm is currently involved in conversations about an infrastructure project at a local university as well as a defense-related project.
“But I’m not in a position to say more about that now,” he said, adding, “These projects may mature in the next six months.”
Shank co-founded SCS in 1996 as a New York-based full-service investment bank which now operates in 19 offices throughout the country with 80 employees managing over $2 trillion through more than 6,000 municipal bond offerings. Cisneros joined the firm in 2015.