Toronto-based investment firm Northleaf Capital Partners has completed the final close for the Northleaf Growth Fund (NGF), its first growth equity fund, which now totals $212 million USD ($285 million CAD).
Economic conditions have made secondary private equity, which Northleaf plans to participate in through this new fund, an increasingly attractive asset class.
Northleaf says the new fund, which surpassed its initial target of $200 million USD ($269 million CAD), will focus on growth-stage North American technology and healthcare companies through a combination of direct co-investments and “opportunistic” secondary transactions. Northleaf did not disclose participating limited partners (LPs) in its funding announcement.
“Our consistent, proactive deal sourcing approach, which leverages our deep relationships and extensive existing portfolio, enables us to source high-conviction opportunities for our investors,” Northleaf managing director and venture partner Ian Carew said in a statement. “We are seeing a strong pipeline of opportunities and our experienced team is excited to put capital to work on behalf of NGF’s investors at the attractive valuations available in the current environment.”
Northleaf says it has raised more than $24 billion USD in capital commitments to date. Its capital comes from a variety of sources, including pension plans, endowments, foundations, financial institutions, and family offices.
Northleaf also runs a fund of funds, and was selected by the federal government to dole out a second round of capital from the Venture Capital Catalyst Initiative (VCCI) in 2022 alongside HarbourVest Partners, Teralys Capital, and Kensington Capital Partners.
RELATED: Northleaf closes $675 million USD for latest private equity fund
In November 2023, Northleaf joined as an LP on Active Impact’s Fund III, a fund focusing on early-stage climate technology startups. In an interview with BetaKit at the time, Active Impact founder and managing partner Mike Winterfield called Northleaf’s involvement with the fund “a big deal,” adding that it speaks to Active Impact’s performance from a financial-returns standpoint.
Northleaf had a busy start to last year as well. The firm held the final closes for its third secondaries fund and eighth private equity fund, closing $1.3 billion USD and $675 million USD, respectively. Those funds also exceeded their initial targets, according to Northleaf.
As the initial public offering market stays cold and public tech stocks have tanked, some early investors have turned to selling their shares, making secondary private equity, which Northleaf plans to participate in through this new fund, an increasingly attractive asset class.
In January, Lexington Partners raised a $22.7-billion USD global secondary fund in response to “the tremendous opportunity in the global secondary market,” its president, Will Warren, said in a statement. Toronto-based Brookfield Asset Management and Silicon Valley’s Sequoia Heritage teamed up in August 2023 with a similar objective.
Northleaf’s managing director and head of private equity, Mike Flood, said the fund’s investors will benefit from the direct and secondary investment capabilities of Northleaf’s global platform.
Feature image courtesy Unsplash. Photo by Justin Cron.
