Toronto-based InstarAGF Asset Management has reached a $680 million first close on its second infrastructure fund, Infrastructure Investor understands.
The initial close is believed to include a significant re-up rate, in addition to new investors from Canada, the US, Europe and Asia. The InstarAGF Essential Infrastructure II fund has a $1 billion target size.
Up to $150 million has been invested by the Texas Municipal Retirement System, with $50 million of this set aside for co-investment; while $75 million is believed to have been committed by joint venture partner AGF Management.
The fund is a continuation of the strategy employed by its predecessor, which closed on C$740 million ($554 million; €488.7 million) in June 2017. It will target mid-market assets in North America with an enterprise value of between $100 million and $1 billion in the energy, utilities and civil infrastructure sectors, and a net return of between 10 and 14 percent.
Assets in the InstarAGF Essential Infrastructure portfolio include a passenger terminal at Billy Bishop Toronto City Airport, Canadian district heating network Creative Energy and Florida-based port logistics and processing company AMPORTS.
InstarAGF was formed in 2014 as a joint venture with Instar Group and AGF Management. It is led by chief executive Gregory Smith.
The firm declined to comment on the fundraising process.