Monday Market Minute | Dec 30, 2019

Looking ahead to 2020 — Canadian private markets poised for growth

What Moved

As 2019 closed, the consensus outlook for Canadian private markets in 2020 was cautiously optimistic. The BoC was expected to hold at 1.75% through at least mid-year, providing rate stability. Housing recovery momentum was building in Ontario and potentially extending to BC. PE dry powder levels suggested accelerated deployment. Private credit demand from mid-market borrowers showed no signs of abating. The Canada Infrastructure Bank was expected to finally ramp activity on its growing project pipeline.

Why It Matters

The setup entering 2020 was arguably the most constructive for Canadian alternatives in years. Stable rates, recovering real estate, expanding private credit demand, maturing VC ecosystems, and government-backed infrastructure spending created tailwinds across every major alternative asset class. For investors who had built alternative allocations during the uncertain periods of 2018-2019, the foundation was in place for compounding returns through the new decade.

Signal to Watch

The unknown unknowns remained the greatest risk. Every year-ahead outlook risked being disrupted by unforeseen events. Maintaining diversification across asset classes, managers, and geographies — the core principle of prudent alternative allocation — remained the best defense against whatever 2020 would bring.

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