New report from McCarthy Tetrault looks ahead to evolving PE landscape
Several key factors will drive the Canadian private equity landscape in 2025, following a year of fewer deals but higher aggregate values focused on technology and consumer industries.
A new report from McCarthy Tetrault sees an evolving PE landscape for the year ahead which will include a shift in fundraising sources to increasingly include high-net-worth individuals, family offices, and retail investors. AI investing is expected to be a prominent driver of the market.
A broadening of the investor pools participating in the market could lead to the emergence of semi-liquid funds, growth in digital investment platforms, regulatory developments facilitating broader access, and increased capital commitments from individual investors.
However, the firm says that new tax disclosure requirements will necessitate careful consideration of reportable transactions involving tax benefits or contractual protections. “Investors should also be aware of tax-audit privilege limitations when engaging accountants or advisors outside legal counsel,” it states.
New legislation like AIDA and updates to the Competition Act will shape private equity activities with stricter enforcement of merger controls affecting private equity transactions.
Canada’s AI industry will continue to benefit from strong government support, but compliance with evolving regulations will be crucial for investors in AI-driven companies, the report highlights. Sports franchise investments are expected to see significant growth but challenges include navigating league approval processes and managing long-term passive investments with limited governance rights.
The report also notes that take-private activity is likely to increase. In 2024, take-private deals were led by metals and mining and technology sectors.
