Canadian private equity (PE) aggregate deal value in 2025 is expected to reach comparable levels to 2024, albeit at a lower deal count — indicating resilience in a market that’s seen continued liquidity challenges, according to a report by McCarthy Tétrault.
The law firm’s On Target: 2026 Private Equity report, released this week, showed that deal value for 2025 to the end of November was around $46 billion, on trend to roughly match 2024’s total of $57 billion. Overall, 2025 was on track to see fewer but larger deals completed (488 to the end of November) than the previous year (646).
Fundraising in Canadian PE recovered in 2025 after tanking by 95% in 2024, when only $1.6 billion was raised by 15 funds, the report noted.
“Much of this slowdown reflected the continued difficulty many managers faced in securing commitments from limited partners in a constrained liquidity environment,” the report said.
By contrast, during the first 11 months of 2025, 17 funds raised $16 billion, reflecting better conditions, despite economic uncertainty. The first quarter was particularly strong, buoyed by two large transactions — La Caisse took Innergex Renewable Energy private in a $10.2-billion deal and GFL Environmental sold its environmental services unit to Apollo and BC Partners for $8 billion.
At the same time, the PE market last year continued a years-long decline in exit volume.
Just 65 exits were recorded to the end of November, compared with 117 in 2024, and a high of 169 in 2021. However, the exits that were completed were larger; last year’s exit value of $25.7 billion nearly matched the previous year’s $28.2 billion, and outstripped the 2021 total of $21.2 billion.
Only one PE-backed exit by IPO was reported last year.
Add-ons represented 67.3% of buyout deals to the end of November, “reflecting the continued focus by PE firms on enhancing existing platforms” as firms launched fewer new platforms, the report said. Add-ons only accounted for 9.1% of Canadian buyout activity by value ($3.4 billion) during that that time, however.
Secondary market
With a moribund IPO market blocking a traditional exit route and fund timelines extending, private equity managers and investors have turned to the secondary market for liquidity.
In its separate 2026 Market Outlook, which covers the market as a whole, Mackenzie Investments noted that globally, secondary transaction volumes rose 45% year over year to a record US$160 billion in 2024. That figure is expected to reach US$200 billion by the end of 2025, it added.
“These transactions have become increasingly valuable in a cautious deal-making environment, allowing managers to generate liquidity without selling prized holdings at sub-optimal times, while giving investors access to seasoned assets with established performance histories,” it said.
For 2026, Mackenzie said it expects “secondary activity to remain strong as investors seek greater flexibility in managing private market exposures.”
It also said it expected private markets would continue to “offer differentiated sources of growth and stability grounded in long-term fundamentals.” Navigating 2026, it added, “will require selectivity, patience and a long-term focus — qualities that have historically rewarded investors through changing market cycles.”
McCarthy Tétrault’s report also identifies digital infrastructure and defence as sectors of interest for PE this year, while Mackenzie highlights private market investment in infrastructure as a key theme as governments continue to face fiscal pressures and climbing debt.