Stream Rides Canadian Energy Private Investment Wave

Stream Asset Financial LP, the private-equity company backed by former Suncor Energy Inc. head Rick George, is seeking more Canadian energy assets after raising C$210 million ($193 million) for its first fund.

Stream, which counts AGF Management Ltd. as its largest investor, is looking to finance so-called midstream assets including pipelines and facilities that process oil and natural gas in the field, said Ryan Dunfield, the Calgary-based company’s president and managing partner. The first fund closed last month.

Stream, formed earlier this year, is joined by private-equity companies including Apollo Global Management LLC and Ontario Teachers’ Pension Plan’s private investment arm in seeking Canadian midstream assets. Canada may require as much as C$20 billion in new midstream infrastructure over 20 years, Dunfield said.

“We’re a passive capital source,” Dunfield said in a Sept. 2 interview, noting that unlike other midstream-focused investors, Stream is only interested in financing facilities, not operating them. “We mimic a midstream contract without our customers having to relinquish control of the asset.”

Apollo in May invested C$500 million in CSV Midstream Solutions Corp., a Calgary-based company focused on building and operating midstream facilities in Alberta and British Columbia. ARC and Teachers were among private investors to establish Kanata Energy Group Ltd., another Calgary-based midstream company, with C$330 million last year.

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Dunfield, formerly of the hedge fund FrontFour Capital Group LLC, partnered with Aaron Bunting, an ex-portfolio manager at hedge fund K2 & Associates Investment Management Inc., and Warren Robinson, who was managing director at Haywood Securities Inc., to form Stream. George, who was Suncor’s chief executive officer for 21 years until May 2012, is an adviser along with Whitecap Resources Inc. CEO Grant Fagerheim and Greg Bay, the founder of investment manager Cypress Capital Management Ltd. in Vancouver.

Stream has already committed one-third of its fund and the co-investments it has secured through four deals, Dunfield said. The company kept its first fund small and only spent 60 days in the market, unlike the norm of 12 to 16 months for a private-equity company, he said.

“We very well could be fundraising next year for follow-on funds,” Dunfield said. “The demand is there from our investor base.”

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