TORONTO — Private investment firm Northleaf Capital Partners has raised US$663.5 million ($908 million) for a new fund that will buy stakes in companies from existing shareholders. 

The fund is Northleaf’s fourth dedicated to secondary investment, which involves buying equity stakes in a company from early investors and employees. At least 22 investors have contributed to the fund, financial disclosures filed in the U.S. and Canada show, with the vast majority of capital—nearly $670 million, at least—from Canadian backers. 

Toronto-based Northleaf initially disclosed plans to raise its fourth secondary fund in July 2024, U.S. Securities and Exchange Commission (SEC) filings show. In January, it reported to the Canadian Securities Administrators that it raised about $670 million for the fund, and last week disclosed it had raised the additional capital. The firm noted in its latest SEC report that it has yet to finalize US$50 million of the capital that’s been committed to the fund to date. 

It’s not clear how much more capital, if any, Northleaf plans to raise for the fund. The firm declined The Logic’s request for comment. 

Secondaries are a pillar of Northleaf’s private-market investment strategy. The firm closed its last secondary fund in February 2023 with US$1.3 billion in capital committed. It has over $4 billion committed across more than 135 secondary deals, according to its website. 

The market for secondary investments is heating up as shareholders look for ways to collect returns on investments they’ve held onto for a while. High interest rates, inflation and a shaky economy have combined to slow interest in taking companies public or acquiring them—the typical ways early backers generate returns on their investments. With those exit windows closed, more shareholders are turning to secondary transactions to unlock their cash. 

Global secondary transactions in the first half of 2025 surpassed US$100 billion, a record for the period, according to U.S. advisory firm Evercore. In the first quarter of the year, secondary deals in Canada accounted for $82 million of the total $231 million in venture capital exits and $41 million of the $130 million in private equity exits, according to industry lobby group Canadian Venture Capital & Private Equity Association. 

Investors have been eyeing deals in the secondary market since many private companies’ valuations plummeted from pandemic-era highs. The opportunity has led to some “mammoth-sized funds,” said Mike Evans, director at Toronto-based secondary advisory firm Setter Capital. 

New York-based Lexington Partners, for example, raised a US$22.7-billion secondary fund in January 2024. In August 2023, Brookfield Asset Management and Silicon Valley’s Sequoia Heritage launched Pinegrove Capital Partners, a US$1-billion fund to buy discounted shares in tech companies. 

While secondary investment activity has picked up, Evans said buyers and sellers are still being cautious. Secondary activity loosely follows what’s happening in the stock market, he explained, which has been volatile for most of the year. Still, purchase prices for secondaries have generally remained high, said Evans, showing that most sellers aren’t willing to discount their shares too heavily. Venture capital deals are an exception, he said, where secondaries are selling at discounts of around 20 to 30 per cent, according to Setter’s own data. 

Evans said many firms are still taking a long time to raise capital for their funds, and some aren’t raising as much as they initially planned. “From a macro picture, people are being careful in terms of where they put their money,” he said. As there have been so few exits, investors don’t have cash to reinvest into new funds, he added. Those dynamics are likely challenging smaller firms rather than established “brand-name” ones, Evans said. “I still think it’s going fairly strong,” he said of the secondary market.