Value Proposition & Investment Philosophy

Value Proposition

Northleaf has a compelling value proposition for investors seeking exposure to global private equity, infrastructure and private credit investments. 

Key elements of Northleaf's value proposition:

  • Opportunity to access value creation outside the public markets through long-term private markets investments
  • Highly experienced professional team with established, successful track record and extensive global network
  • Lower fees than traditional private equity/infrastructure/private credit fund models – mitigating the “j-curve” effect and improving net returns to investors
  • Market-leading, employee-owned franchise backed by long-term commitments from Canada’s leading institutional investors
  • Comprehensive tax solution for cross border private markets investments

Investment Philosophy and Approach

In a global economic climate characterized by heightened volatility and macro-economic uncertainty, Northleaf’s disciplined private markets programs provide innovative solutions to investors seeking attractive, risk adjusted returns that are less correlated with the broader public markets, and offer the potential for enhanced long-term returns with lower volatility. 

Available through both pooled fund programs and customized investment mandates, Northleaf believes that its focused private market portfolios offer the potential for higher returns and greater diversification.  Private equity continues to offer incremental capital gains with less volatility, given both the range of private company return drivers and the downside protection resulting from professional hands-on management by experienced owners.  Infrastructure offers stable, inflation-protected long-term cash flows from the ownership of mature, conservatively positioned long-duration assets.  Private credit offers consistent long-term attractive returns and current income in a growing asset class from a diversified portfolio of loans to private equity-backed companies.

Private Equity

Northleaf’s global private equity program capitalizes on the opportunity for disciplined, selective investment in private equity transactions globally, taking advantage of both the renewed emphasis on traditional private equity value creation in mid-market companies and the accelerating growth and business-building opportunities for private companies across the “innovation economy”. 

Northleaf’s private equity investment approach is characterized by:

  • Active secondary and co-investments that augment and build upon a well-established primary fund investment program – Northleaf’s focused portfolio of top-tier mid-market and growth-oriented primary fund investments is complemented by active secondary and co-investment strategies that accelerate the investment pace and enhance returns
  • Innovative, cost-effective structures designed to mitigate the j-curve and maximize net returns – Northleaf’s global private equity funds minimize ‘fee on fee’ concerns by charging on invested (not committed) capital, deducting the underlying manager’s future fees and carried interest when pricing secondary investment opportunities, and typically co-investing on a no fee/carried interest basis
  • An integrated team, proactive sourcing, a differentiated global platform and active portfolio construction – Northleaf’s distinctive investment model leverages an integrated global team to generate attractive opportunities across each element of its private equity strategy.  Northleaf’s well-established fund manager relationships not only generate attractive returns from their individual sectors of focus and expertise, but also create informational advantages and preferred deal flow for Northleaf’s secondary and co-investment transactions

Infrastructure

Northleaf’s OECD-focused infrastructure program capitalizes on the opportunity to generate attractive, long-term returns from direct investments in mature, conservatively-positioned infrastructure assets through a fund structure with a low-cost structure. 

Northleaf’s infrastructure investment approach is characterized by:

  • A consistent focus on direct investments in mature assets in developed markets – Northleaf’s investment strategy is designed to take advantage of the full range of direct investment opportunities in infrastructure assets in OECD jurisdictions, with a focus on smaller transactions
  • An innovative, cost-effective structure that enables a long-term investment strategy – Northleaf’s funds have been carefully designed with a cost-effective approach based on invested (not committed) capital, with no carried interest or performance fees.  Coupled with an indefinite fund life that encourages long-term investments, this well-aligned fund structure supports and enables a conservative buy-and-hold approach to infrastructure investment
  • Proactive deal sourcing, valuation discipline and active portfolio development – Northleaf’s distinctive investment model is characterized by proactive deal sourcing across a highly experienced investment team with established global relationships, a disciplined pricing and due diligence process applied to each prospective transaction, and an asset management framework focused on active portfolio development, transparent valuation and best-in-class reporting on infrastructure assets

Private Credit

Northleaf’s global private credit program capitalizes on the attractive market opportunity for private credit investments, including a growing private credit market as banks continue to retrench and face ongoing regulatory restrictions; robust legal structures and attractive premiums versus public markets that reduce risk and generate attractive relative value; and quarterly cash yield on floating rate loans that provides attractive current income and mitigates risk of rising interest rates. 

Northleaf’s private credit investment approach is characterized by:

  • A broad and flexible global investment mandate with an ability to invest across the capital structure – Northleaf’s investment strategy is focused primarily on senior secured transactions in private equity-backed companies
  • An innovative, cost-effective structure that offers significant tax advantages for cross-border investors – Northleaf’s funds have been carefully designed with a cost-effective approach based on invested (not committed) capital
  • An integrated global team, a differentiated approach to sourcing and active portfolio construction – Northleaf’s distinctive investment model is characterized by an experienced team in North America and Europe, leveraging Northleaf’s established local private markets capabilities.  Northleaf’s well-established relationships with middle market private equity managers, as well as its broader strategic relationship with Antares Capital, generate attractive investment opportunities, provide informational advantages and increased deal flow

Consistently applied across each of its private equity, infrastructure and private credit funds and mandates, this investment philosophy and approach continues to deliver attractive long-term returns consistent with Northleaf’s value proposition to its investors.