InstarAGF Asset Management and AGF Management Limited have announced the successful first close of the InstarAGF Essential Infrastructure Fund with CAD$372 million (US$276.7 million) in firm equity commitments, representing approximately 50% of the fund's targeted size, and the potential for cornerstone investors to upsize to CAD$422 (US$313.9 million) million in committed capital prior to the final close of the Fund.
The fund, which focuses on mid-sized infrastructure assets in North America, attracted a diversified, high quality group of institutional and high net worth investors from Canada, Europe, the United Kingdom and United States. In addition, all of InstarAGF’s employees have made investments in the Fund, thereby ensuring strong alignment with investors.
Gregory Smith, President and Chief Executive Officer of InstarAGF, stated:
“We are delighted to partner with an exceptional group of cornerstone investors, which validates InstarAGF’s distinctive middle market value proposition, deep industry relationships and the quality of the Fund’s seed assets. Infrastructure is an increasingly important component of most institutional portfolios, which reflects growing demand for real assets that are more resilient to economic cycles and less correlated with traditional asset classes, and that deliver current income while providing inflation protection.”
Approximately $135 million of the capital raised by the fund has already been committed to two investments: an interest in the passenger terminal at Billy Bishop Toronto City Airport, a vital transportation hub for the city of Toronto and surrounding region; and a 30-megawatt wind power development project in British Columbia that is expected to start operating in the first quarter of 2017.
Blake C. Goldring, Chairman and Chief Executive Officer of AGF, stated:
“Accomplishing the first close of the InstarAGF Essential Infrastructure Fund represents a significant milestone for our alternatives platform, and clearly establishes InstarAGF as a leading Canadian infrastructure investment firm. InstarAGF diversifies AGF’s investment capabilities and solutions for institutional, high net worth, and retail clients globally, and enhances our ability to deliver innovative strategies that offer investors downside risk protection and long-term capital growth.”
The fund seeks to acquire power, utilities, civil and social infrastructure assets that exhibit sustainable downside protection, typically as a result of long-term contracts, concession agreements or a regulatory regime, and where InstarAGF’s expertise and ability to add value to the asset creates the potential for capital appreciation. InstarAGF currently expects to achieve the final closing of the Fund, which has a targeted size of $750 million, by the end of 2016.