Thought Leadership: The Opportunity for Private Equity Investment in a Challenging Global Environment

In 2022, Private equity started riding a wave of momentum. In the previous year, the global industry enjoyed record deal sizes and the second-best fund-raising year for general partners (GPs) in history. In Canada, the PE deal count was more than 20 percent higher than the previous record, set in 2019, and dollars invested returned to pre-pandemic levels, according to the CVCA. ​

“Valuations were at historical highs across many sectors, and companies could secure capital and sell their business at great prices – so it was not surprising to see record transaction levels in 2021,” says Justin Catalano, Managing Director and Group Head of Private Equity at Fengate Asset Management in Toronto.

Recent high inflation that many observers thought would be transitory has settled in. In response, monetary policymakers have rapidly shifted from dovish to hawkish and appear to be accelerating what is anticipated to be a historic tightening, with the Bank of Canada raising its benchmark rate last year by 50 basis points – the largest one-time hike in more than 20 years. Against this backdrop of tightening financial conditions, outsized rate increases on the horizon, conflict in Ukraine, and lockdowns in China have exacerbated pandemic-related global supply chain issues, further stoked inflation, and contributed to additional volatility and uncertainty in capital markets.

Read full article as seen in CVCA Central: The Opportunity for Private Equity Investment in a Challenging Global Environment | CVCA Central