CPP Investments manages approximately CA$114 billion in assets across Canada. Its holdings span hundreds of companies in sectors including technology, financial services, natural resources, renewables, and infrastructure. This article is the first in Mapping Canadian Capital, a new series from the CPP Investments Insights Institute. Each installment spotlights an investment from CPP Investments’ Canadian portfolio, offering insight into how a major global capital allocator approaches long-term partnership, value creation, and the complexities of investing in an evolving economic landscape.
For global investors managing hundreds of billions in capital, the toughest deals to reach are often the smallest.
In Canada, the “mid-market”—including companies with earnings between $10 million and $75 million—is rich with innovative, high-potential firms. But it’s also fragmented, with companies too small for major capital allocators like CPP Investments to access directly and cost-effectively.
Indeed, global investment funds are generally structured to source, evaluate, and manage transactions much larger in scale. As a result, the time and resources required to pursue smaller deals often outweigh the potential gains, even when the underlying companies are strong.
Enter Toronto-based Northleaf Capital Partners. By aggregating smaller opportunities across private equity, credit, and infrastructure, Northleaf enables large investors to deploy capital efficiently in smaller firms while maintaining high performance. Indeed, Northleaf’s specialized approach does what few others can: help a $700 billion investment fund scale down, while helping promising companies scale up.
The made-in-Canada model, first developed by Northleaf and CPP Investments over two decades ago, has since been exported around the world.
“It’s not just that CPP Investments has backed us with significant capital,” said Stuart Waugh, Managing Partner of Northleaf Capital Partners. “It’s that Northleaf has functioned as an extension of the CPP Investments team. We’ve built this bespoke, interactive and highly productive partnership together.”
Northleaf traces its origins to the early 2000s, when Waugh and a small team managed TD Bank’s proprietary global private equity investments, launching Canada’s first global private equity fund in 2002. With backing from CPP Investments and other core investors, Northleaf spun out from TD Bank in 2009, starting its infrastructure program in 2010 and its private credit program in 2016.
Its $3 billion Canadian program has supported 130 Canadian funds and approximately 900 Canadian companies, reflecting the depth of its domestic market engagement. Yet its value proposition resonates as strongly with investors in Abu Dhabi or Tokyo as it does in Calgary or Montreal: a scalable bridge between large and growing pools of capital and the global mid-market opportunity set.
By breaking through the usual cost and complexity barriers that keep large investors out of smaller deals, it also helps CPP Investments serve the best interests of its contributors and beneficiaries.
“Investing efficiently in smaller companies requires trusted partners on the ground,” said Caitlin Gubbels, Senior Managing Director & Global Head of Private Equity at CPP Investments. “Northleaf gives us that access and helps amplify our impact across the Canadian market.”
Canadian firms backed by Northleaf
- Shopify: A global commerce platform that provides essential internet infrastructure and trusted tools to start, scale, market and run a retail business of any size.
- Verafin: A provider of cloud-based, secure software for fraud detection, BSA/AML compliance, high-risk customer monitoring, and information sharing.
- Chinook Therapeutics: A biopharmaceutical company focused on the discovery, development, and commercialization of precision medicines for kidney diseases.
- CCM Hockey: A leading designer, manufacturer, and marketer of professional and amateur hockey equipment.
- A&W Canada: The second largest quick-service hamburger restaurant chain in Canada.
Building a Canadian venture and growth ecosystem
In the early 2000s, Canada’s private markets were still in their infancy.
“There were very few third-party infrastructure funds, credit was still dominated by banks, and private equity was just emerging,” Waugh recalls. “It was a fragmented and underdeveloped market, particularly in the venture capital and growth ecosystem.”
The landscape began to shift with the introduction of two landmark public-private initiatives: the Venture Capital Action Plan (VCAP) and its successor, the Venture Capital Catalyst Initiative (VCCI). Under both programs, the federal government deployed capital alongside that of private investors in professionally-managed, large-scale fund-of-funds and co-investment vehicles—such as those managed by Northleaf. These funds would then invest in underlying venture capital funds and, in some cases, direct co-investments in Canadian companies. By generating strong commercial returns, the goal was to attract additional private capital, bolstering the venture capital and early-stage growth ecosystems that support high-potential Canadian companies.
From the start, Northleaf played a central role in the evolution of these ecosystems. It managed the 2008 Ontario Venture Capital Fund (OVCF), an earlier program designed to strengthen Ontario’s venture capital market. Later, it managed multiple vintages of the Northleaf Venture Catalyst Fund (NVCF) under the VCAP and VCCI programs. Each fund was designed to strengthen the domestic venture market by generating strong returns and building local capabilities and networks.
“Based on our success with the original OVCF mandate, we were selected as one of the managers for the federal program, and we’re now on to the third version of that,” said Waugh. “If you want to point to a public policy success, you can look to what that program has achieved. It’s generated attractive returns for investors and been instrumental in creating and funding a number of very strong Canadian managers who now compete for capital globally.”
For CPP Investments, participation in these funds has added a powerful dimension to its Canadian investment activities—enabling it to help seed the next generation of globally relevant businesses. Shopify, Verafin, Chinook and others now stand as examples of how aligned public-private capital can accelerate innovation in the domestic market.
“Public-private initiatives like VCCI and VCAP helped lay the groundwork for a competitive Canadian venture ecosystem,” said Gubbels. “Our partnership with Northleaf has allowed us to participate in that growth in a meaningful way from both a return and ecosystem-building standpoint.”
Canada’s mid-market advantage — and its challenge
Canada offers many of the fundamentals sought by global private markets investors: a strong regulatory system, stable currency, world-class talent, and deep capital markets. But twenty years later, the majority of Canadian companies remain relatively small compared to their global peers. As Waugh said: “Over 90% of businesses in Canada would be mid-market or smaller by North American standards.”
That fragmentation presents a deployment challenge, but also a unique advantage. “The competitive intensity at the smaller end of the market is lower,” he notes. “You get the opportunity to partner closely with management teams over a five- to seven-year period to strategically build and scale a business. If you do that well, there are plenty of larger pools of capital ready to buy in.”
This is where Northleaf’s strategy thrives. Through vehicles like the Canadian Fund of Funds (CFOF) and Northleaf Venture Catalyst Fund (NVCF), it has helped CPP Investments and others access this fragmented opportunity set at scale—and offered a cost-effective gateway to smaller local networks, deal flows and expertise.
It’s also where patient capital provides a strategic edge. CPP Investments’ long-term horizon allows it to support growth steadily over years, not just quarters.
“There’s no shortage of innovation and entrepreneurial drive in Canada,” Gubbels said. “The challenge is scale. Our work with Northleaf helps ensure that promising companies and fund managers can grow and that we as a global investor can support them in a resource-efficient way for CPP Investments.”
A Canadian partnership with global impact
After nearly two decades, the partnership between Northleaf and CPP Investments is still evolving. Beyond capital commitments, Northleaf and CPP Investments have co-developed customized investment parameters, implementing an innovative evergreen fund structure. They’ve also co-invested in strategic investment platforms like Antares Capital, a leading U.S. sponsor-backed private credit manager.
That trusted relationship has allowed Northleaf to bring its model to global markets, developing bespoke mid-market private equity, private credit and infrastructure strategies for sovereign wealth funds, pensions, and insurance groups in the U.S., Europe, Middle East, Asia and Australia.
And in every conversation, Canada’s brand and heritage add weight.
“Northleaf’s success abroad reflects well on Canadian innovation and on the kind of partnership-based investing we aim to do at CPP Investments,” said Gubbels.
Indeed, Northleaf’s core idea—that private capital could be scaled down without compromising returns—has shown to be durable, transferable, and catalytic. And it all began with a belief that the mid-market matters.
Why CPP Investments backed Northleaf:
- A trusted gateway to Canada’s mid-market Investing directly in businesses earning $10–75 million requires operational flexibility. Northleaf offered a platform to deploy capital in this space with scale and selectivity.
- Access to Canadian fund managers Northleaf served as a conduit to emerging Canadian general partners (GPs), many of whom have gone on to build world-class track records.
- Supportive public-private venture policy Through the VCAP and VCCI initiatives, Northleaf helped CPP Investments participate in the revitalization of Canada’s early-stage venture ecosystem.
- Solid returns across multiple fund vintages over two decades of partnership.
- Opportunity to export Canadian investing excellence globally Northleaf’s ability to replicate the Canadian Fund of Funds (CFOF) model for other large global allocators has extended the reach of Canadian expertise into international markets.
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