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Deal volume in Canada jumped
almost 20 percent in 2015, according to the Canadian Venture Capital and Private
Equity Association (CVCA).
Last year saw 399 completed
deals, compared with 334 a year earlier, according to the CVCA’s Canadian Private Equity Market Overview
and as reported by Private Equity International.
PEI’s Research & Analytics
team have taken a further look at the Canadian private equity market to find
out if fundraising figures for closed-ended vehicles investing into the country
have similarly risen.
Since 2010, Canada-focused
private equity fundraising has followed a clear trend of a peak year followed
by a sharp fall in aggregate capital raised. With a relatively small number of
funds closed year-on-year when compared with the country’s larger neighbour,
the US, this is likely due to fund managers taking time to invest capital
raised in a peak year before launching a new vehicle.
If the trend continues, 2016
is expected to be a quiet 12 months for fundraising. However, aggregate capital
raised this year is already 42 percent of the total amount raised in 2015. Two
months into 2016, $1.3 billion has been raised from the close of four private
equity funds focused on the region.
Many Canadian funds draw
capital from US investors and make exits in US dollars. Economic conditions
have therefore been favourable for investments into the country, with the US
dollar strong against its Canadian counterpart. This can only continue to have
a positive influence on fundraising in the year ahead.
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