Monday Market Minute | Dec 15, 2025

Private credit delivers 9%+ in 2025 — the asset class that rose to the moment

What Moved

Full-year private credit performance data confirmed what the quarterly reports had been signalling: Canadian private credit delivered net returns of 9.2-10.8% in 2025, depending on strategy and manager. The performance stood out against every public market benchmark — the FTSE Canada Universe Bond Index returned approximately 5.2%, and the TSX Composite returned roughly 8.5%. Default rates remained below 2.0%, and the spread advantage over public credit held through the year despite BoC cuts. AUM in Canadian private credit grew an estimated 22% year-over-year.

Why It Matters

The 2025 vintage confirmed private credit's transition from an alternative allocation to a core portfolio position for Canadian accredited investors. The asset class delivered equity-like returns with fixed-income-like risk characteristics — a combination rarely available in public markets. The structural drivers — bank retrenchment, mortgage renewal displacement, and mid-market financing demand — were durable, not cyclical. For investors who had committed capital in 2024-2025, the returns validated the thesis. For those who had waited, the performance data provided the evidence needed to overcome inertia and allocate.

Signal to Watch

Whether the 2026 private credit environment would sustain 9%+ returns or whether increased competition from new fund launches and potential bank re-entry would compress yields back toward historical averages.

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