Canadian PE Deals Reach Record High in 2022, Despite Downshift in Total Investment Value

Business News

February 22nd, 2023 – Canadian Venture Capital and Private Equity Association

Q4 2022 saw CAD $2.3B invested over 194 deals as PE investors focus on smaller deals and add-ons due to macroeconomic pressures. Despite a downshift in total investment value year-over-year, CAD $10 billion was invested across 890 deals, a record-high for deal count.

Over 2022, Canadian PE investors saw a lack of larger deals due to the fastest interest rate increase cycle in the last 40 years. The largest deal was the CAD $271M debt deal raised by Westland Insurance Group from Blackstone Credit. Deals under CAD $25M continued to dominate in the Canadian market, accounting for 85% of all disclosed PE transactions in 2022. 

“The PE market in Canada is well-positioned to weather economic downturns and contribute to the country’s recovery,” said Kim Furlong, Chief Executive Officer, CVCA. ​“Despite global uncertainty, LPs remain confident in the strength of PE, which is particularly attractive during volatile conditions. PE also plays a critical, and often overlooked role, in supporting Canadian SMEs, which are vital to the country’s economic growth, and in helping transition business ownership as the population ages.”

The industrial and manufacturing sector surpassed the information and communications technology (ICT) sector for the first time in 2022, with CAD $2.4B invested over 212 deals, while ICT received CAD $1.6B over 134 deals. The top sectors were followed by Consumer & Retail with CAD $363M across 102 deals, and Life Sciences with CAD $315M across 129 deals.

Exit activity via M&A outpaced the 5‑year average in the number of transactions by 45% but trailed behind in total value by 47% due to downward pressure on exit value caused by drops in liquidity markets, valuation adjustments, and global uncertainty.

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