Canadian private equity firm Novacap has put plans to raise a CAD 500m (USD 381.67m) mid-market infrastructure and energy fund on ice, Inframation has learned.
According to ex-Novacap partner David Crouch, plans for the fund were shelved in April 2018 as it wasn’t able to reach a first close, despite receiving substantial support from Novacap’s investors.
“Many of the LPs were already invested into large GPs,” Crouch said. “Large GPs are getting bigger and bigger and many of the LPs didn’t want many relationships other than those they already had.”
Graeme Johnson, senior partner and new head of business development and IR, confirmed the fund was put on hold, but said the company is reviewing its strategy and would likely be back with an infrastructure-focused vehicle in the short to medium term. Novacap has CAD 2.26bn in AUM spread over six different funds.
Inframation reported in January, that Novacap was marketing Novacap Infra Energy I L.P. a 12-year, middle market fund vehicle, targeting equity checks of between CAD 30m-70m.
It would have had a CAD 750m hard cap, some 8-12 investments and would have prioritized OECD countries.
Crouch said that he and fellow partners Etienne Lavoie-Gagnon and Claude Bourque have since decided to refocus on their core business of Aediles, an advisory and asset management firm.
Crouch said that while many of the LPs they had connected with were wary of investing in the fund vehicle, they were keen on finding direct investment opportunities, originating and managing assets.
“We are currently working with different investors from Europe, North and South America on USD 20m-300m equity deals and structuring platforms,” he said.
According to Crouch and Lavoie-Gagnon, Aediles has a good deal flow in Latin America in the Pacific Alliance countries, but also in North America.
“We’re targeting transactions in growth areas such as energy storage, district heating, microgrids, district energy, data (data centers) and value-added volume based infrastructure in transportation,” said Lavoie-Gagnon.
According to the Aediles partners, the firm has closed transportation and energy deals in Canada, Chile, Colombia and Peru.