Montfort Capital Corp. 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. 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 2022.

Given the ongoing challenges in the private equity fundraising and exit environment, the NAV loan market continues to see tremendous growth.