InstarAGF to grow infra unit through Kindle tie-up

The move comes as the North American mid-market firm aims to raise $566m for its flagship fund.

InstarAGF Asset Management and Kindle Capital (Kindle), two Toronto-based investment firms, have announced a partnership aimed at growing their respective infrastructure units. 

Kindle founder George So is set to join InstarAGF as a partner where he will originate new opportunities for the InstarAGF Essential Infrastructure Fund and manage transaction and financing processes. He will be joined by new InstarAGF vice president Alex Jerome, formerly a Kindle vice president who also worked alongside So while the two were a part of the Canadian Pension Plan Investment Board's (CPPIB) infrastructure investment team. 

As part of the agreement, InstarAGF will provide asset management and administrative services support to Kindle's as it pursues infrastructure syndication and co-investment opportunities in North America and globally. Both companies will maintain operational independence. 

While no specific impetus was given as a reason to form the partnership at this moment, an InstarAGF representative indicated that So and Instar founding chief executive Gregory Smith have maintained a friendship for many years and that they had been considering the possibility of a partnership between their companies for quite some time. According to the representative: “Culturally, our firms are very entrepreneurial and Instar had a platform that was very attractive to George”. 

So formed Kindle in 2009 to lead and manage groups of Canadian institutional investors in syndication and co-investment opportunities in infrastructure with notable transaction partners including Macquarie Communication Infrastructure Group, 407ETR, Behrman Capital, Anglian Water Group, and Colonial First State's Diversified Infrastructure Fund. While serving at the CPPIB prior to founding Kindle, So was responsible for executing direct investments valued at approximately C$7 billion ($5.28 billion; €4.72 billion) and was part of a team managing a C$4.5 billion asset portfolio. 

Jerome brings nine years of experience in evaluation, execution and ongoing management of global infrastructure investments with him to InstarAGF.  

So and Jerome will join InstarAGF partner Ching-Yen Chen, who joined the firm in September 2014 and also focuses on the origination of infrastructure investment opportunities. 

InstarAGF is a joint venture between Instar Group and AGF Management Limited – the latter of which is one of Canada's largest independent investment management firms with $33 billion in assets under management – launched in 2014 with a focus on mid-market direct investments and co-investments in North America. 

In January, as part of the Nieuport Aviation Partners consortium, InstarAGF purchased the passenger terminal at Toronto's Billy Bishop Airport for a reported $750 million, an investment that InstarAGF now touts as a “cornerstone investment” of InstarAGF's Essential Infrastructure Fund. The company has also acquired two wind development projects in British Columbia from Vancouver-based Zero Emission Energy Development. 

The flagship fund, launched earlier this year, has its sights set on a C$400 million first close by the end of 2015. It has a final target of C$750 million and a hard cap of C$1 billion, according to reports.