AGF Announces Changes to Its Relationship with Instar Group Inc.
26 Mai 2021 - 02:30PM
AGF Management Limited (AGF) today announced that it has entered
into a definitive agreement with Instar Group Inc. (Instar) to
conclude their joint venture relationship in InstarAGF Asset
Management Inc. (InstarAGF) following the establishment of its two
flagship funds, InstarAGF Essential Infrastructure Fund I and II
(together, the InstarAGF Funds). AGF will retain its economic
interest in the InstarAGF Funds including an upcoming third fund
(Fund III) managed by Instar, which AGF has agreed to support with
an anticipated US$50 million capital commitment.
“We are strategically pivoting our focus to further diversify
our relationships and capital. Growing our private alternatives
business remains integral to our strategy including bringing to
market unique alternative offerings for our clients,” said Kevin
McCreadie, Chief Executive Officer and Chief Investment Officer,
AGF.
AGF has $2.6 billion of AUM and fee earning assets in its
private alternatives business today. AGF’s strategic vision for
private alternatives combines diversified capabilities across
multiple planks alongside participation as a core investor in
bespoke and distinct opportunities that deliver added value for the
firm’s shareholders.
“We are excited about the path forward for AGF, including
deepening our platform with our upcoming private credit fund
launches and our ongoing work with AGF’s Alternatives Advisory
Committee,” added McCreadie. “The conclusion of the InstarAGF joint
venture is a natural progression of the relationship between our
two firms and delivers each of us with the flexibility to
accelerate our respective business goals.”
Based on the terms of the agreements, AGF will maintain its
respective investment and carried interest participation in the
InstarAGF Funds, invest in and receive a carried interest
entitlement in Fund III and receive ongoing fees based on assets
under management.
AGF has entered into an arrangement with Instar whereby AGF will
earn ongoing annual fees of 14 bps on the assets under management
of the InstarAGF Funds and, upon AGF’s commitment to the Fund III,
AGF will earn ongoing annual fees of 7 bps on the assets under
management of Fund III. Revenue earned from the fee arrangement and
carried interest entities will directly flow to AGF’s EBITDA as
there are no incremental expenses.
AGF’s monthly AUM disclosure going forward will be modified to
include a line “other fee earning assets” related to AUM associated
with this agreement. Disclosure related to income from this fee
arrangement will be included in the financial statement notes of
AGF’s quarterly financial statements. AGF’s continued interest in
the carried interest and the fee arrangement will be recognized as
financial instruments under IFRS9. As a result, the current
estimated fair value, of AGF’s share of the carried interest and
the fee arrangement will be initially recorded on the Balance Sheet
and will be carried at its estimated fair value thereafter. Revenue
related to the licensing arrangement and carried interest will be
recognized in the Statement of Income as amounts become
realized.
AGF’s Alternatives Advisory Committee
AGF’s Alternative Advisory Committee, chaired by Blake Goldring,
Executive Chairman, AGF, which launched in September 2020 provides
strategic insight and advice to the Executive Management Team of
AGF. Ron Mock, former President and CEO at the Ontario Teachers’
Pension Plan, and Michael Latimer, former President and CEO of
OMERS, are current members of the Committee.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent
and globally diverse asset management firm. AGF brings a
disciplined approach to delivering excellence in investment
management through its fundamental, quantitative, alternative and
high-net-worth businesses focused on providing an exceptional
client experience. AGF’s suite of investment solutions extends
globally to a wide range of clients, from financial advisors and
individual investors to institutional investors including pension
plans, corporate plans, sovereign wealth funds and endowments and
foundations.
AGF has investment operations and client servicing teams on the
ground in North America, Europe and Asia. With over $40 billion in
total assets under management, AGF serves more than 700,000
investors. AGF trades on the Toronto Stock Exchange under the
symbol AGF.B.
Media ContactAmanda Marchment Director,
Corporate Communications 416-865-4160 amanda.marchment@agf.com
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