Monday Market Minute | Sep 16, 2024

PE deal activity surges — the rebound is confirmed

What Moved

CVCA preliminary data confirmed a dramatic rebound in Canadian PE deal activity. H2 2024 was tracking at more than double the volume of H2 2023, driven by lower financing costs, narrowing bid-ask spreads, and renewed LP appetite for commitments. Mid-market buyouts led the recovery, with healthcare, business services, and technology drawing the most sponsor interest.

Why It Matters

The PE rebound was the clearest signal that the rate-driven investment freeze of 2022–2023 had ended. For investors in PE funds, the surge in deal activity meant capital was being deployed into what could become a highly attractive vintage — assets acquired at reset valuations with improving fundamentals. The distribution cycle was also improving as exits accelerated.

Signal to Watch

Fund performance dispersion would widen significantly in this environment. Managers who maintained discipline — buying at reasonable multiples despite competitive pressure — would outperform those who overpaid to deploy dry powder. Manager selection remained the single most important variable in PE allocation.

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