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Canada's Novacap Closes $1 Billion Digital Fund on AI Investment Trend

Jan 22, 2025 - financialpost.com
Canadian private equity firm Novacap Investments Inc. has successfully closed a $1 billion fund aimed at investing in digital infrastructure assets, following a two-year fundraising process. The fund targets about 10 regional companies that provide connectivity and data access services, with plans to invest up to $100 million in each. Despite challenges from rising interest rates and a slow market for acquisitions, the firm exceeded its original target of $750 million. Novacap has already invested in four U.S. businesses, including H5 Data Centers LLC and All West Communications Inc.

The fund's partners include institutional firms, family offices, and high-net-worth individuals from North America, Europe, the Middle East, and Asia. Novacap's focus on digital infrastructure is driven by the rapid growth in artificial intelligence, which increases demand for power, storage, and connectivity. Founded in 1981, Novacap is known for its investments in technology companies and other sectors, with notable successes like payment processor Nuvei Corp. Despite a challenging fundraising environment, the digital infrastructure fund saw strong demand, reflecting the ongoing need for investment in this area.

Key takeaways:

  • Canadian private equity firm Novacap Investments Inc. has closed a $1 billion fund to invest in digital infrastructure assets.
  • The fund targets about 10 regional companies that sell connectivity and data access services, with investments up to $100 million each.
  • Novacap has already invested in four US businesses, including H5 Data Centers LLC and All West Communications Inc.
  • Digital infrastructure demand is driven by the rapid growth in artificial intelligence, according to Novacap's Ted Mocarski.
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