Monday Market Minute | Jan 17, 2022

Canadian PE fundraising posts record 2021 totals as managers rush to close before conditions shift

What Moved

CVCA preliminary data indicated Canadian private equity and venture capital fundraising reached record levels in 2021, with several major funds closing oversubscribed. Brookfield, Onex, and mid-market managers all benefited from institutional allocators increasing their alternatives exposure. The urgency to deploy was palpable — managers recognized that rising rates would compress entry multiples and make leveraged acquisitions more expensive.

Why It Matters

Record dry powder entering a tightening cycle creates a nuanced picture. Funds that closed in late 2021 and early 2022 had the capital to be opportunistic as valuations corrected, but the pressure to deploy within investment periods could push managers into deals at still-elevated prices. For LP investors, vintage year 2022 funds would be defined by deployment discipline.

Signal to Watch

CVCA's full-year 2021 PE deal report, expected in February, which would reveal whether deal velocity was sustainable or already showing signs of a peak.

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