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InstarAGF’s fund invests in mid-market infrastructure opportunities focused in North America.

InstarAGF Asset Management Inc. is stoking the ranks to fuel its hunt for North American infrastructure investments.

The Toronto-based alternative asset manager has brought on George So as a partner. He joins from Kindle Capital Group Inc., the infrastructure investment firm he founded that has $500-million in assets under management.

Mr. So will help to find and manage investment opportunities for the InstarAGF Essential Infrastructure Fund, which is expected to have its first close later this year after raising about $400-million. The goal for the fund is $750-million.

Alex Jerome will also join InstarAGF as vice-president, having held the same title at Kindle.

InstarAGF was formed less than two years ago and is jointly owned by chief executive officer Gregory Smith's company Instar Group Inc. and AGF Management Ltd.. InstarAGF is best known for its purchase of Billy Bishop Toronto City Airport terminal earlier this year, along with a group of investors. The deal value wasn't disclosed. The fund recently made another investment in wind power, acquiring assets from renewable energy company Zero Emission Energy Developments Inc. in British Columbia.

InstarAGF's fund invests in mid-market infrastructure opportunities focused in North America, which Mr. Smith said can outperform the larger assets that are attracting direct investment from the country's biggest institutional investors such as pension funds.

Attractive investment opportunities could include light-rail transit, energy storage and public-private partnership opportunities in municipalities, universities, school boards and hospitals (often referred to as the "MUSH" sector). Mr. Smith said he expects there will be more activity in the United States as universities look for alternative sources of financing for projects such as improving energy efficiency or upgrading pipes, which could be challenging projects to manage and raise funds for.

While North America remains the focus, there could be opportunities for InstarAGF to look abroad, since both Mr. Smith and Mr. So have global experience looking for infrastructure investments.

Kindle was started in 2009 by Mr. So and it has invested in global infrastructure and private equity opportunities alongside groups of smaller Canadian institutional investors. Kindle's portfolio includes investments in U.K. emergency services company Airwave, Macquarie Communications Infrastructure Group in Australia and the Greater Toronto Area's 407 express toll road.

Mr. Smith said Kindle won't be making any new investments, but InstarAGF will support the Kindle portfolio with asset management and administrative services.

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