Monday Market Minute | Sep 16, 2024
Canadian PE deal activity surges in H2 2024, with volume up sharply from 2023. The rebound is driven by improved financing and narrowing bid-ask spreads.
What Moved
CVCA preliminary data confirmed a dramatic rebound in Canadian PE deal activity. H2 2024 was tracking at more than double the volume of H2 2023, driven by lower financing costs, narrowing bid-ask spreads, and renewed LP appetite for commitments. Mid-market buyouts led the recovery, with healthcare, business services, and technology drawing the most sponsor interest.
Why It Matters
The PE rebound was the clearest signal that the rate-driven investment freeze of 2022–2023 had ended. For investors in PE funds, the surge in deal activity meant capital was being deployed into what could become a highly attractive vintage — assets acquired at reset valuations with improving fundamentals. The distribution cycle was also improving as exits accelerated.
Signal to Watch
Fund performance dispersion would widen significantly in this environment. Managers who maintained discipline — buying at reasonable multiples despite competitive pressure — would outperform those who overpaid to deploy dry powder. Manager selection remained the single most important variable in PE allocation.