Northleaf returns to market with secondaries and primary funds

Northleaf Capital Partners is returning to market to raise capital for both a secondaries fund and a primary fund after making 30 investments across its private equity platform last year.

The Toronto-headquartered investment firm plans to launch its sophomore secondaries fund, Northleaf Secondary Partners II, and its seventh global private equity fund, Northleaf Private Equity Investors VII, in early 2017, according to its 2016 Year in Review, published in mid-February.

The target sizes of these two vehicles were not disclosed and Northleaf declined to comment on its fundraising plans.

Northleaf’s debut dedicated secondaries fund, Northleaf Secondary Partners, closed above its $200 million target on $255 million in May 2014 after six months of fundraising, according to PEI data. The firm’s secondaries programme has delivered a three-year internal rate of return of 19.4 percent, according to the review.

Northleaf Secondary Partners is still in its investment phase, according to the firm’s website.

Northleaf Global Private Equity Investors VI, the firm’s latest primary fund of funds, launched in December 2013 and closed above its $495 million target. The firm’s primary programme delivered an 11.3 percent IRR over a ten-year period. It was not clear if the returns are net or gross.

Northleaf completed 12 secondaries investments, 13 primary fund commitments and five direct co-investments, and distributed more than $362 million in cash to investors, the review notes. It also held the final close on its second infrastructure fund on $950 million and amassed $1.4 billion for its first private credit fund, which invests across the debt capital structure in loans to mid-market private companies in North America and Europe.

The firm also grew its private equity team by appointing a vice-president and two associates.

Northleaf spun out of TD Capital Private Equity Investors, the private equity fund of funds and co-investment arm of Canada’s TD Bank Financial Group in 2009. It has $9 billion in assets under management, according to PEI data.