Canada Private Equity Investors

Private Equity Groups in Canada Worried Over Economy

Private equity firms are worried that Canada’s economy may be headed for a double dip.  Read more about Canada’s private equity industry in this article.  Despite Canada being one of the most resistant to the economic downturn of the developed countries, investors’ confidence seems to be low.  Buyout activity in Canada is only around $2 billion in the first nine months of 2009, that’s a big decline from the $8.5 billion last year. 

 ”We’re having a hard time understanding where the economy is going. It is still a market in our view where you need to be cautious and careful,” said Michael Lay, a managing partner at ONCAP, the fund established by Onex Corp (OCX.TO) to invest in North American small-cap companies.

Some private equity partners say concern the economy will dip again is leading them to shelve plans for time-consuming, costly initial public offerings for portfolio companies until the outlook points to a sustained recovery.

Data this week showed that retail sales rose twice as much as expected in September as consumers ramped up spending on a wide range of goods, suggesting the economy grew at a healthy clip in the month.

But a week ago Bank of Canada Governor Mark Carney said the economy performed worse than expected in the third quarter and, while recovering, risks further setbacks due to the sharp rise of the Canadian dollar.  Source

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