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Where Are the Hotspots for Canadian Private Equity? – October 2015

by Bradley McEwan

  • 08 Oct 2015
  • PE

Canada is well known for producing more than 80% of the world’s maple syrup, but the North American country also has a budding appetite for private equity. There are currently 255 active Canada-based private equity firms according to Preqin’s Fund Managers Profiles. Over the last 10 years these private equity firms have raised almost $60bn collectively and have an estimated $20bn in dry powder. This blog will take a look at the top 10 firms by amount of capital raised, as well as Toronto’s growing role in the financial world.

Of these 255 firms, just under half are located in Toronto, the most prominent city for private equity firms in Canada. Although not the capital city, Toronto is the most populous city in Canada with over 2.6 million inhabitants and has emerged as one of the fastest growing financial centres following the financial crisis. The second most populous city in terms of private equity fund managers is Vancouver, home to 15% of the country’s private equity firms, followed by Calgary and Montreal with 9% and 8% of firms respectively.

The firm that has raised the most capital over the last 10 years is Onex Corporation. Headquartered in Toronto, the firm has raised nearly $14bn from seven funds and has an estimated $4.5bn in dry powder available to invest. Onex Corporation employs a buyout strategy, focusing on acquiring and building businesses in North America; it operates in a diverse range of industries such as business services, industrials and healthcare.

Having raised almost $3.7bn in funds, ARC Financial Corp. has collected the most capital for a Canada-based firm headquartered outside Toronto. The Calgary-based firm has estimated dry powder totalling over $1.6bn. Founded in 1989, ARC Financial Corp. focuses on investments in the energy sector of Canada and also seeks to make equity investments in the conventional exploration and production industry, oilfield services, infrastructure and emerging new sources of supply such as unconventional gas.

Preqin data shows that Canada has an active private equity scene, particularly in Toronto, with firms actively making investments across a diverse range of sectors. As the global recovery from the financial crisis continues, Toronto is expected to maintain its status as Canada’s primary location for business operations in the financial sector. This is supported by the latest Global Financial Centres Index from Z/Yen Group and Qatar Financial Centre, which ranks Toronto as the second most important financial centre in North America, behind only New York.

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