Northleaf closes USD $450 million asset-based fund

Northleaf has closed its first asset-based specialty finance fund at about USD $450 million, including commitments to the fund and related co-investment vehicles.

The final close marks the private markets investor's expansion into a segment of private credit focused on income streams and receivables rather than conventional corporate lending. The strategy invests in areas including entertainment royalties, legal assets, healthcare receivables and factoring.

The fund, Northleaf Asset-Based Specialty Finance, builds on an existing platform that has invested about USD $1.4 billion across 21 transactions since 2018. That activity gave Northleaf an operating history in the market before launching a dedicated vehicle.

Private credit managers have been broadening their product ranges as institutional investors seek returns that are less tied to public market movements. Asset-based lending has drawn interest because it is backed by pools of assets or contracted cash flows, often in specialised corners of the economy.

Since entering the market, Northleaf has acted as lead or sole lender in roughly 90% of these deals. That position can give a lender greater control over pricing, structure and loan terms, while also increasing responsibility for underwriting and origination.

The firm manages the strategy across North America, Europe and Australia through its broader private markets platform. The investment team targets transactions in the US, Canada, Europe and Australia.

Team expansion

Alongside the fund close, Northleaf has appointed JD Gettmann as Managing Director and Global Head of Asset-Based Specialty Finance. He joins from MidCap Financial, where he co-founded and led the lender finance business.

According to Northleaf, Gettmann brings more than two decades of experience in asset-based finance and has deployed more than USD $15 billion across commercial and consumer asset classes.

The appointment adds senior leadership to a strategy Northleaf is seeking to scale after building its initial track record through direct investments. It also suggests the firm sees room to win more business in specialised parts of the credit market where sourcing relationships can be hard to replicate.

David Ross, Managing Director and Head of Private Credit at Northleaf, linked the strategy to changing investor demand in more unsettled markets.

"As markets have become more volatile, we've seen investors place a greater emphasis on resilience and diversification within their private credit portfolios," Ross said.

"Asset-based specialty finance offers a complementary set of return drivers compared to many traditional credit strategies, combining attractive cash yield with low-correlation assets and strong downside protections. This strategy reflects years of building the relationships, underwriting expertise and origination capabilities that are critical to investing in this market," he added.

Broader platform

Northleaf is one of a growing group of private markets firms trying to deepen their presence in non-bank lending. Large institutional investors, family offices, wealth managers and insurers have increased allocations to private credit in recent years, drawn by the prospect of regular income and bespoke deal structures.

It has raised more than USD $32 billion in commitments across private equity and venture capital, private credit and infrastructure. Its investor base includes more than 375 institutional and family office backers, along with wealth, asset management and insurance partners.

Northleaf, a global private markets investor focused on mid-market companies and assets, operates from offices in Toronto, Chicago, London, Los Angeles, Melbourne, Menlo Park, Montreal, New York, Seoul and Tokyo. The firm has a team of 300 people.

Gettmann said the platform already has a foundation to build on as the firm pursues further origination opportunities.

"Northleaf has built a differentiated asset-based specialty finance platform, supported by a strong track record, disciplined underwriting and deep origination relationships," said JD Gettmann, Managing Director and Global Head of Asset-Based Specialty Finance at Northleaf.

"I'm excited to build on that foundation, work alongside the existing team and expand the platform strategically by deepening our origination capabilities, broadening our investment solutions and continuing to deliver attractive risk-adjusted returns and meaningful diversification for Northleaf's investors," Gettmann said.