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 is using 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, sub-advisor (Third Eye Capital Management) and 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 10.17%, as of Sept. 30. 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.

“BMO is always looking for new and innovative ways to support the growth of its clients,” Karl Ireland, director of specialty finance at BMO Commercial Bank, Canada, said. “Leveraging our expertise and sector knowledge, the specialty finance team was able to deepen a strong and broad relationship between BMO and Ninepoint Partners. This unique transaction is the result of a great collaboration between BMO’s bankers and the experienced and reputable fund managers at Ninepoint Partners and Third Eye Capital Management.”

“Private credit has experienced tremendous growth over the past decade and has become an established asset class for investors seeking diversified return streams that are largely uncorrelated to public markets,” David Sum, managing director of Ninepoint’s alternative income group. “The recent rise in interest rates and tightening of credit conditions have resulted in a lending environment which leads us to believe this can be an extremely strong vintage. Another trend driving overall asset growth has been the increasing demand from retail investors. As retail investors focus on portfolio diversification, private credit has emerged as an attractive option for those seeking strong risk-adjusted returns while benefitting from exposure outside of traditional public equity and public fixed income holdings.”