What this module covers
Canadian private markets differ from the larger US market in ways that follow from their size and from the makeup of the Canadian economy. This module describes three structural features: a smaller market with fewer competing funds, a large number of privately held mid-market businesses facing succession, and the effect of investing in a home market and currency. It then records the policy and interest-rate conditions observed as at early 2026, under that date. Structural features change slowly. Conditions change, and the last section describes one period only.
- A smaller market with fewer competing funds
- Privately held mid-market businesses
- The home market and currency
- Conditions as at early 2026
A smaller market with fewer competing funds
The US private equity market is far larger than Canada's, with many more funds competing to buy companies. Competition among buyers raises the prices paid for companies. A higher purchase price leaves less room for a return when the company is later sold, so in a crowded market the returns available on new acquisitions tend to be compressed.
The Canadian market is smaller and less crowded. Fewer funds compete for the same companies. Fewer competing buyers can mean lower purchase prices, and more transactions negotiated directly between a seller and a single buyer rather than run as auctions among many bidders. Whether that holds for a given transaction depends on the manager, the sector and the period.
The same smallness has other consequences. A smaller market has fewer managers, and fewer potential buyers for a company when a fund comes to sell it. Competition is a structural feature of the market, and it bears on both the purchase and the sale.