Monday Market Minute | Jun 30, 2025

Mid-year check: private markets outperform public benchmarks across the board

What Moved

At the 2025 midpoint, Canadian private markets had delivered meaningfully. Private credit funds returned 4.5-5.5% in H1 (annualizing above 9%). Domestic-focused PE funds posted positive marks driven by exit activity and stable portfolio performance. Real estate fund NAVs stabilized after two years of writedowns. In contrast, the TSX Composite was up only 3.2% year-to-date, with tariff-exposed industrials and energy names dragging on the index. The FTSE Canada Universe Bond Index returned approximately 2.8%.

Why It Matters

The H1 scorecard validated the core alternative investments thesis: private markets delivered superior risk-adjusted returns precisely when public market volatility was elevated. The 250-350bps outperformance of private credit over public bonds was particularly striking given comparable credit quality. For investors who had increased alternative allocations during the 2022-2024 rebalancing period, the mid-year results confirmed that patience and illiquidity tolerance were being compensated. The data strengthened the case for maintaining or increasing private market exposure in H2.

Signal to Watch

H2 would test whether private market outperformance was structural or a first-half anomaly. The BoC rate path, tariff resolution, and housing trajectory would determine whether the advantage held through year-end.

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