Key Takeaways
- • Canadian PE fundraising recovered sharply in 2025, with 17 funds raising $16 billion across the first 11 months—a dramatic rebound from 2024's 95% collapse when only $1.6 billion was raised by 15 funds, signaling improved LP confidence despite persistent economic uncertainty.
- • Deal value in 2025 is tracking toward $46 billion (through November), slightly below 2024's $57 billion total, but with fewer, larger transactions (488 deals vs. 646 in 2024), demonstrating a qualitative shift toward bigger-ticket investments.
- • Exit volume contracted sharply by 44% year-over-year to 65 exits through November 2025 versus 117 in 2024, continuing a multi-year decline from 2021's peak of 169 exits; however, completed exits achieved strong valuations of $25.7 billion, nearly matching 2024's $28.2 billion despite lower transaction count.
- • Two large early-2025 transactions—La Caisse's $10.2 billion take-private of Innergex Renewable Energy and the $8 billion sale of GFL Environmental's environmental services unit to Apollo and BC Partners—anchored Q1 fundraising momentum.
- • IPO exit channels remain largely closed, with only one PE-backed IPO exit recorded in 2025, while add-on transactions (67 recorded) continue to serve as a primary exit mechanism in a liquidity-constrained environment.
Summary
Canadian private equity is experiencing a measured recovery in fundraising activity, though persistent liquidity constraints continue to define market dynamics heading into 2026. According to McCarthy Tétrault's On Target: 2026 Private Equity report, the sector rebounded meaningfully in 2025 after a severe contraction in 2024, when fundraising activity collapsed by 95% as limited partners tightened commitments amid broader liquidity stress. The 2025 recovery—marked by 17 funds raising $16 billion through November—represents a substantial reversal and signals renewed LP appetite, despite macroeconomic headwinds.
Deal value for 2025 is on track to reach approximately $46 billion by year-end, marginally below 2024's $57 billion aggregate but reflecting a compositional shift toward fewer, larger transactions. Through November, 488 deals had been completed, compared with 646 in the prior year, indicating that PE sponsors are pursuing strategically larger targets while overall deal velocity has moderated. The Q1 performance proved particularly robust, driven by two headline transactions: La Caisse's $10.2 billion take-private of Innergex Renewable Energy and Apollo and BC Partners' $8 billion acquisition of GFL Environmental's environmental services unit. These transactions provided significant momentum to early-year fundraising and demonstrated sponsor appetite for large platform acquisitions.
Exit activity remains significantly constrained. The Canadian PE market recorded only 65 exits through November 2025, down 44% from 117 exits in 2024 and representing a continuation of the sector's multi-year decline from a 2021 peak of 169 exits. However, the exits that closed achieved substantial valuations: the 2025 exit value of $25.7 billion nearly matched 2024's $28.2 billion and exceeded 2021's $21.2 billion, underscoring that while exit volume has contracted materially, transaction quality and pricing remain resilient. The IPO market remains largely inaccessible for PE sponsors, with only a single PE-backed IPO exit recorded in 2025. Add-on acquisitions (67 transactions) have emerged as the predominant exit mechanism, reflecting managers' reliance on secondary strategies and continuation vehicles to address liquidity pressures.
The underlying challenge persists: despite fundraising recovery, liquidity constraints continue to shape manager strategy and LP behavior. The decline in exit volumes, coupled with reduced overall deal count, reflects ongoing difficulty in crystallizing returns and redeploying capital at the velocity that LPs historically experienced. Managers increasingly employ secondaries and add-on strategies to manage portfolio liquidity, signaling that while conditions have improved markedly from 2024's nadir, the PE market has not yet returned to pre-liquidity-crisis norms.
Deal value for 2025 is on track to reach approximately $46 billion by year-end, marginally below 2024's $57 billion aggregate but reflecting a compositional shift toward fewer, larger transactions. Through November, 488 deals had been completed, compared with 646 in the prior year, indicating that PE sponsors are pursuing strategically larger targets while overall deal velocity has moderated. The Q1 performance proved particularly robust, driven by two headline transactions: La Caisse's $10.2 billion take-private of Innergex Renewable Energy and Apollo and BC Partners' $8 billion acquisition of GFL Environmental's environmental services unit. These transactions provided significant momentum to early-year fundraising and demonstrated sponsor appetite for large platform acquisitions.
Exit activity remains significantly constrained. The Canadian PE market recorded only 65 exits through November 2025, down 44% from 117 exits in 2024 and representing a continuation of the sector's multi-year decline from a 2021 peak of 169 exits. However, the exits that closed achieved substantial valuations: the 2025 exit value of $25.7 billion nearly matched 2024's $28.2 billion and exceeded 2021's $21.2 billion, underscoring that while exit volume has contracted materially, transaction quality and pricing remain resilient. The IPO market remains largely inaccessible for PE sponsors, with only a single PE-backed IPO exit recorded in 2025. Add-on acquisitions (67 transactions) have emerged as the predominant exit mechanism, reflecting managers' reliance on secondary strategies and continuation vehicles to address liquidity pressures.
The underlying challenge persists: despite fundraising recovery, liquidity constraints continue to shape manager strategy and LP behavior. The decline in exit volumes, coupled with reduced overall deal count, reflects ongoing difficulty in crystallizing returns and redeploying capital at the velocity that LPs historically experienced. Managers increasingly employ secondaries and add-on strategies to manage portfolio liquidity, signaling that while conditions have improved markedly from 2024's nadir, the PE market has not yet returned to pre-liquidity-crisis norms.
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