Global Infrastructure Partners (GIP) and EQT Infrastructure agreed to acquire AES Corp in a $12.5B transaction, the year's largest private equity move into power generation assets. The consortium will take over AES's electricity generation, transmission, and distribution operations across multiple markets.
"At a time when significant investments are needed in new electricity generation, transmission, and distribution capacity, especially in the United States, we will utilize GIP's energy infrastructure experience to help accelerate AES's commitment to affordable, safe, and reliable power," said Bayo Ogunlesi, GIP's chairman.
The deal reflects a broader reallocation of PE capital toward infrastructure. Energy Capital Partners merged with Bridgepoint in 2025, combining $40B in assets under management focused on power and renewables. Onex reported in Q4 2025 that its Convex acquisition and AIG partnership "meaningfully enhances growth prospects," with CEO Bobby Le Blanc stating the firm has "significant momentum heading into 2026 and beyond."
PE firms are targeting infrastructure for three reasons: stable cash flows from regulated utilities, capital requirements for grid modernization exceeding $2T through 2030, and portfolio diversification away from volatile growth sectors. Oak-Eagle AcquireCo announced its merger will proceed independently of tender offers, indicating deal structures are adapting to secure financing in uncertain credit markets.
The AES transaction values the company at a premium to recent utility multiples, suggesting PE firms see upside in operational improvements. "We will work with the AES team to strengthen its operating platform, including enhancing reliability and long-term competitiveness, while supporting a responsible and sustainable energy transition," said Masoud Homayoun of EQT Infrastructure.
This capital deployment comes as PE firms manage aging portfolio companies from 2019-2021 vintage years. Infrastructure offers lower volatility than traditional LBOs while providing exit opportunities through secondary sales to pension funds and sovereign wealth funds seeking inflation-hedged assets. The power sector alone saw $47B in PE transactions in 2025, up 34% from 2024.
Investors should monitor infrastructure valuations as multiple PE bidders compete for limited assets. Premiums paid today will determine returns when these positions exit in 5-7 years, particularly if interest rates remain elevated or power demand growth slows.