Novacap has announced the close of its fifth mid-market technology fund, blowing past its original target of $600 million by 40% with $840 million in commitments. Fund V will bring the Montreal-based private equity group’s total assets under management to $2.25 billion and marks the largest in the 35-year-old firm’s history.
Three years ago, Novacap raised $380 million for its fourth mid-market tech fund. The new fund, over double in size of its predecessor, was raised by recruiting a larger and more diverse investor group. Returning LPs, primarily comprised of institutional investors and wealthy individuals in Canada, the U.S. and Europe, were joined by new LPs recruited largely from abroad. The news is a testament of success for the private equity firm’s larger goal to gain co-investment resources and increase its visibility outside of its home market in Canada.
Approximately 50 domestic and international LPs committed to Fund V, most likely including backing from $271 billion pension fund Caisse de dépôt et placement du Québec.
The new fund’s strategy will be in line with previous funds, as the firm carries out control-stake investments in Canada and U.S. technology, media and telecom companies. Novacap plans to make investments between $20 million to $100 million in companies with revenue between $30 million and $300 million.
Alongside raising new capital, Novacap has been active on the deal front in the recent period, investing in companies such as virtual-data-room platform Firmex, medical-imaging specialist Intelerad and enterprise-resource-planning software provider Syntax. Earlier this year, the firm sold telecom and IT solutions player Oxford Networks to Oak Hill Capital Partners, acquiring Oak Hill’s FirstLight Fiber as part of the deal.
