Toronto-based InstarAGF Asset Management has reached a CAD$372 million ($277 million; €255 million) first close on its Essential Infrastructure Fund.
Total commitments to the vehicle fall just shy of the company's CAD$400 million first close target, though potential exists for 'cornerstone' investors to raise that number to CAD$422 million prior to final close, according to a statement.
Instar AGF noted that all of its employees have made investments in the fund in a show of strength that is meant to exhibit “strong alignment with investors”.
President and chief executive Gregory Smith said that the first close “validates InstarAGF's distinctive middle market value proposition, deep industry relationships, and the quality of the Fund's seed assets”.
Through the fund, InstarAGF seeks to acquire mid-sized power, utilities, civil, and social infrastructure assets in North America. The firm has already disbursed $135 million via two investments: an interest in the passenger terminal at Billy Bishop Airport in Toronto, and a 30MW wind power development project in British Columbia that is expected to commence operations in the first quarter of 2017.
“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,” Smith said.
The fund has a target of CAD$750 million, with a hard cap set at CAD$1 billion.
Along with the news came the announcement that Rick Byers, most recently executive vice president at Borealis Infrastructure, will be joining InstarAGF's advisory board. Byers was in charge of global fundraising efforts at the Canadian investor.
Prior to that, Byers was employed with BMO Capital Markets where he focused on energy and transportation investments including Greater Toronto Airports Authority, the 407 ETR, NAV Canada, VIA Rail and Atomic Energy of Canada. He is currently sitting on the boards of directors of PPP Canada and the Toronto Transit Commission.
InstarAGF's advisory board also includes KPMG partner Dennis Freeman; David Mullen, managing director of Graycliff Partners and chair of the Canadian Venture Capital and Private Equity Association; Mike Crawley, executive vice president of business development at Northland Power; and Jim Dougan, president of Eastern Canada at PCL Constructors Canada.