The economic distress from the coronavirus pandemic is hitting the Canadian private equity market hard. The number of deals reached in Canada this year through Oct. 6 fell to 194, which at that pace would represent a 60% decline from 2019, according to PitchBook. The value of the deals plunged as well, falling to $26.8 billion. This represents a $53.2 billion decrease, or 66%, from 2019, indicating that many investment managers have suspended or canceled previously agreed-upon deals.
The COVID-19 pandemic has brought significant economic hardship for many industry verticals, particularly those in real estate and retail. It’s in those sectors, as well as others, that the support of a private equity partner may bring additional liquidity, operations and network support, and the needed expertise to struggling companies. Once volatility and COVID-19 concerns subside, corporates will continue to need to recapitalize and strategically access the capital markets, and private equity can help.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.