Toronto-based independent, employee-owned global private markets fund manager Northleaf Capital Partners has raised more than US$1.4 billion in capital through “a core group of Canadian pension plans” to launch its global private credit program, the strategy behind which is meant to provide investors with diversified exposure to private credit investments while offering flexible debt financing solutions to privately held companies.
As part of this launch, a Northleaf-managed investment fund, the Northleaf Star Holdings fund, has acquired a 16% equity stake in Antares Holdings from Canada Pension Plan Investment Board (CPPIB) Credit Investments Inc.
The CPPIB manages the assets of the C$300.5 billion Canada Pension Plan, and plans to retain the remainder of its interest in Antares, which has facilitated more than US$120 billion in financing for middle-market private equity-backed transactions over the past five years.
In August 2015, CPPIB purchased Antares for $12 billion from GE Capital.
“Today’s launch represents a unique and compelling opportunity for Northleaf’s investors,” said Stuart Waugh, Managing Partner of Northleaf. “Our private credit strategy complements and extends the principal investment strategies in private equity and infrastructure that we have developed successfully over the past 15 years. CPPIB has been one of our largest investment partners for more than 10 years. We are very pleased that our investment in Antares alongside CPPIB Credit Investments and Antares management will further strengthen that partnership while providing Northleaf with an opportunity to create significant value for our investors.”
Northleaf, which became a management-owned private equity firm in 2009 after being spun out of the TD Bank Financial Group, also has an office in London, and a newly-established office in Chicago.
CPPIB has been an investor with Northleaf for more than 10 years.
The Antares transaction brings Northleaf’s funds under management to a total of US$9 billion in capital commitments on behalf of more than 70 institutional investors.
“Antares has outperformed expectations since our acquisition by combining its market-leading origination platform with CPPIB’s access to capital at scale. This transaction will further broaden and diversify Antares’ investor base,” said Ryan Selwood, Managing Director, Head of Direct Private Equity, CPPIB. “CPPIB is fully committed to its highly strategic platform investment in Antares and will remain its largest shareholder. We look forward to partnering with Northleaf to fund the continued expansion of Antares’ assets in order to meet demand from an expanding and increasingly global group of institutional clients.”
The stake in Antares gives Northleaf access to Antares’ North American private equity sponsors, to develop separately managed accounts and other investment vehicles designed specifically for Canadian asset managers, institutional investors and private clients.
“Northleaf has recruited a talented and experienced investment team, developed a strategic relationship with Antares, a market leader in North American mid-market sponsor lending, and held a successful closing for our first global private credit fund, Northleaf Private Credit I,” said Northleaf Managing Director and Head of Private Credit, David Ross. “Across our global strategy, we are uniquely positioned to deliver strong returns to our investors and offer attractive financing solutions to private equity firms and companies in the middle market.”
Based in the London office, Ross joined in 2016 to lead Northleaf’s global private credit team, having previously worked as a Managing Director, Global Head of Sourcing, with Sankaty Advisors (now Bain Capital Credit), and before that Co-Head of Sankaty’s London office from 2009 to 2013.
Northleaf’s global private credit fund, Northleaf Private Credit I, has held a successful first closing and is poised to provide investors with diversified exposure to private credit investments, including senior, unitranche, second lien, mezzanine and subordinated loans in North America, the UK, Western Europe and Australia, with a primary focus on private equity-backed companies.