Montfort Capital Corp. (“Montfort” or the “Company”) (TSXV: MONT) (OTCQB: MONTF), a trusted provider of focused private credit strategies for institutional investors, family offices, and wealth managers, today announced the launch of a new strategic growth initiative, Nuvo Financial (Nuvo), which is focused on providing net asset value (NAV) loans to small and mid-sized investment funds in Canada. The new private credit growth initiative has received up to $50 million of funding from a Canadian chartered bank. Nuvo will leverage the core capabilities, resources, and infrastructure of Montfort, which currently manages a diversified collection of consumer and commercial private credit strategies.
“Nuvo is adding to Montfort’s private credit business by offering net asset value-backed loans, known as ‘NAV loans’, primarily to small and mid-sized private market fund managers. This is a specialized and fast-growing market in Canada and elsewhere,” said Sam Hall, Vice President of Nuvo. “The new business reflects our commitment to growth and strategic innovation in scalable private credit products and underscores our deep sector knowledge and ability to develop new business opportunities in private credit.”
NAV loans allow investment fund managers to borrow against the equity value of an investment fund. It is estimated that the US market for NAV-based financings is between $80-$100 billion, with about $30 billion of transactions funded in 20221. Given the ongoing challenges in the private equity fundraising and exit environment, the NAV loan market continues to see tremendous growth.