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InstarAGF closes initial fundraising of C$372 million for new infrastructure fund

March 3
7:53 AM 2016

InstarAGF Asset Management announced the initial closure of its C$372 million fundraising for InstarAGF Essential Infrastructure Fund. InstarAGF has an objective size of C$750 million and seeks to achieve the complete closure of the fund within 2016 end. The company noted that basic investors have the choice to upsize the fund capital to C$422 million prior to the fund closure.

InstarAGF has pledged to invest fund amount of nearly C$135 million in Billy Bishop's passenger terminal and in British Columbia's '30-megawatt wind power' growth project, which is anticipated to begin operations in the first three-month period of 2017. The fund also aims to purchase power, social and civil infrastructure assets and amenities with ecological downside protection.

According to Gregory Smith, chief executive officer and president of InstarAGF, infrastructure is the vital factor that highlights the increasing demand for real properties. He added the company is pleased to join hands with qualified investors, who have recognised the market value of InstarAGF. Blake C. Goldring, CEO and chairman of AGF, said that InstarAGF improves AGF's potential to provide inventive policies, which delivers downside hazard protection as well as cash growth for investors over the long period.

Moreover, InstarAGF named Rick Byers as a member of its advisory board. Recently, Byers held a position as executive vice president at Borealis Infrastructure. He was also responsible for transaction related advisory roles at BMO Capital Markets, where he worked from 1991 - 2007. He is also a member of PPP Canada's board of directors.

Gregory Smith told Bloomberg that municipalities, which spend 75% - 80% in infrastructure, gets just roughly 10% as tax dollars. Many discussions regarding the fund for city infrastructure arises as a result of this low tax amount, he added. The basic investors of InstarAGF, which is a combined venture between AGF Management and Instar Group, includes organized investors from Europe, the US and Canada as well as life insurance firms.

The fund is expecting for investments in the range of C$100 million to C$1 billion, Smith said. In addition, the fund's investment policies arrived at a period when the government of Canada is aiming to increase the infrastructure investment amount to C$125 billion in the next decade.

Last September, the Canada-based fund had said that it intended to raise a fund amount between C$400 million and C$450 million in the initial fundraising round. Instability in the global stock market combined with record low bond yields has led major investors around the globe to invest in assets like real estate, hedge funds, private equity and infrastructure, as reported by Reuters.

Investors are closely monitoring the trend in the global market in order to push their capital into a sector that will yield more in the future. Funds like InstarAGF are aiming to receive huge investments from these investors.

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