Novacap is best known for its investments in technology companies, along with financial services and other sectors
The new fund is targeting about 10 regional companies that sell connectivity and data access services, backed by physical assets, with a strategy to invest as much as US$100 million in each.
The Brossard, Quebec-based firm, which manages about C$11 billion, began courting investors for the digital fund at a time when rising interest rates and a slow market for acquisitions made it difficult for some private equity shops to raise fresh capital.
“Yes, it was long,” chief executive Pascal Tremblay said of the fundraising process. “It was difficult in some instances, but it was very successful,” exceeding the firm’s original target of US$750 million.
Novacap has already deployed some of the money into four United States businesses, including H5 Data Centers LLC and All West Communications Inc., a home internet provider with customers in Utah and Wyoming.
Institutional firms, family offices and high-net worth individuals from North America, Europe, the Middle East and Asia are among the fund’s partners, Novacap officials said, declining to give specific names.
Novacap, founded in 1981, is perhaps best known for its investments in technology companies, but the firm also invests in financial services and other sectors, with stakes in consumer business such as women’s clothing designer Joseph Ribkoff and mattress manufacturer Kingsdown.
Tremblay, 55, believes that 2025 will still not be “boom year” for the private equity market. “It’s going to be a strange year for sure because some of the big funds that were raised in 2020 and 2021, you need to get the money out in the space.”
In Canada, only C$2.25 billion was raised for private equity funds in the first 11 months of last year, the lowest aggregate amount since 2018, “as challenges achieving liquidity slowed the return of capital to limited partners,” law firm McCarthy Tetrault LLP said in a report released last week.