Monday Market Minute | Dec 22, 2025

2025 year in review — tariffs tested Canadian private markets and they held

What Moved

Looking back on 2025, the defining narrative was clear: US tariffs created the most significant trade disruption in a generation, and Canadian private markets not only survived but outperformed. The BoC cut rates from 3.25% to 2.00-2.25%. Housing recovered moderately. Private credit delivered 9%+ returns. PE exits normalized. Infrastructure emerged as the top performer. MICs capitalized on the mortgage renewal wave. VC set records in AI. The sectors that struggled — cross-border manufacturing PE, trade-exposed private credit — were the exception, not the rule.

Why It Matters

The 2025 experience reinforced the fundamental case for alternative investments in Canadian portfolios. Private markets provided returns that public markets could not match, with lower volatility and lower correlation to the trade-driven headlines that dominated the news cycle. The investors who performed best were those who maintained discipline, focused on domestically oriented strategies, and treated uncertainty as an opportunity rather than a reason to retreat. The lesson was not that tariffs did not matter — they clearly did — but that a well-constructed private markets portfolio was resilient to them.

Signal to Watch

The 2026 outlook would be shaped by trade normalization progress, the BoC's rate stability, housing supply responses, and whether private credit's structural advantages would persist or begin to erode.

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