Monday Market Minute | Jan 17, 2022
CVCA data shows record Canadian PE fundraising as managers close funds ahead of tightening financial conditions in 2022.
What Moved
CVCA preliminary data indicated Canadian private equity and venture capital fundraising reached record levels in 2021, with several major funds closing oversubscribed. Brookfield, Onex, and mid-market managers all benefited from institutional allocators increasing their alternatives exposure. The urgency to deploy was palpable — managers recognized that rising rates would compress entry multiples and make leveraged acquisitions more expensive.
Why It Matters
Record dry powder entering a tightening cycle creates a nuanced picture. Funds that closed in late 2021 and early 2022 had the capital to be opportunistic as valuations corrected, but the pressure to deploy within investment periods could push managers into deals at still-elevated prices. For LP investors, vintage year 2022 funds would be defined by deployment discipline.
Signal to Watch
CVCA's full-year 2021 PE deal report, expected in February, which would reveal whether deal velocity was sustainable or already showing signs of a peak.