North American private equity firm Novacap has announced the final closing of its first-ever digital infrastructure fund, Novacap Digital Infrastructure Fund I. The fund, dedicated exclusively to investing in digital infrastructure, exceeded its initial target, raising over $1 billion. Investors included a mix of institutional entities, family offices, and high-net-worth individuals from North America, Europe, the Middle East, and Asia.
Investment Focus: Connectivity and Data Access Services
The newly launched fund aims to invest in lower mid-market companies across North America. These companies will primarily provide essential connectivity and data access services supported by robust physical assets. Novacap’s leadership emphasized their commitment to fostering long-term, sustainable value creation for stakeholders.
Pascal Tremblay, President, CEO, and Managing Partner at Novacap, remarked, “A commitment of this size for a new platform is a testament to our experienced and dedicated team’s track record of helping entrepreneurs build leading companies while delivering sustainable long-term value to all stakeholders.”
Early Investments: A Look at the Portfolio
The fund has already made significant progress by investing in four platform companies:
- INdigital: A provider of 911 emergency communication services.
- All West Communications: A broadband network operator.
- Communications Tower Group: A developer and acquirer of wireless digital assets.
- HyScale Data Centers: A newly formed data center operator developed in partnership with H5 Data Centers.
HyScale Data Centers: The Joint Venture with H5
Earlier this month, Novacap partnered with H5 Data Centers to form HyScale Data Centers, a joint venture focused on developing data center facilities across North America. While detailed information about HyScale remains limited, reports suggest the venture’s first acquisitions include data centers previously operated by Yahoo! in Lockport, New York, Quincy, Washington, and Omaha, Nebraska.
HyScale’s formation represents Novacap’s fourth investment through its digital infrastructure platform. LinkedIn profiles of Novacap employees describe HyScale as a strategic initiative aimed at enhancing data center ownership and operations across the continent.
Fundraising Success and Strategic Collaboration
The fundraising process for Novacap Digital Infrastructure Fund I was led by Evercore Private Funds Group, serving as the exclusive global placement agent. Legal counsel was provided by Davies Ward Phillips & Vineberg LLP.
Alex Russ, Senior Managing Director at Evercore, noted, “The substantial demand that the fund received in this highly competitive fundraising market really speaks to the caliber of their team and to their differentiated investment strategy. We are delighted to have partnered with Novacap on their successful fundraise and congratulate the entire Novacap team on reaching this important milestone in the firm’s history.”
About Novacap
Founded in 1981, Novacap is a Canadian private equity firm managing over C$10 billion (US$7 billion) in assets. The firm has a strong track record of partnering with entrepreneurs to build industry-leading companies while delivering long-term value.
FAQs
1. What is the focus of Novacap Digital Infrastructure Fund I?
The fund targets equity investments in North American lower mid-market companies providing connectivity and data access services supported by robust physical assets.
2. Who are the investors in Novacap Digital Infrastructure Fund I?
The fund’s investors include institutional investors, family offices, and high-net-worth individuals from North America, Europe, the Middle East, and Asia.
3. What companies has the fund invested in so far?
The fund has invested in INdigital, All West Communications, Communications Tower Group, and HyScale Data Centers.
4. What is HyScale Data Centers?
HyScale Data Centers is a joint venture between Novacap and H5 Data Centers, focusing on developing and operating data center facilities across North America.
5. How much has Novacap raised for its digital infrastructure fund?
Novacap raised over $1 billion, exceeding its initial target for the fund.
