Ninepoint Partners, the manager of Ninepoint-TEC Private Credit Fund II, secured a $100 million revolving credit facility from BMO, with $50 million committed and an additional $50 million available through an accordion feature. Ninepoint will use the funding to support the credit fund’s continued growth, new origination activity and liquidity requirements.
BMO acted as the sole arranger, sole bookrunner and agent for the credit facility and conducted due diligence on the fund and its underlying loans; the fund’s sub-advisor, Third Eye Capital Management; and the fund’s manager, Ninepoint Partners.
“Securing a credit facility for the fund by a top-tier Canadian bank is a strong endorsement of both the prospects of private credit as an asset class and the value the Ninepoint-TEC strategy offers to investors,” John Wilson, managing partner and co-CEO of Ninepoint, said. “Private investments are inherently less liquid and a flexible credit facility enables us to act more nimbly in closing new opportunities, managing cash flows in the fund and supporting the growth of the strategy.”
Since its inception in 2010, the Ninepoint-TEC strategy has provided investors with risk-adjusted average net annualized returns of 10.37%. The fund has achieved this by structuring primarily senior first lien loans against business assets with potential cash flows and/or liquidation or break-up values.
“Compared to the public markets, the uncorrelated nature of private credit continues to benefit retail and institutional investors in diversifying their portfolios. Given recent bank failures and general tightening of credit availability, there is unprecedented opportunity for private credit to deploy capital at very attractive risk-adjusted returns,” Ramesh Kashyap, managing director in Ninepoint’s alternative income group, said. “Total assets under management in the global private credit asset class is expected to nearly double in size by 2027 to $2.25 trillion at a compound annual growth rate of 10.4%. Furthermore, retail investor demand is expected to play a significant part in the continued growth of the asset class as investors seek out opportunities for better portfolio diversification.”
