Getting Into Canadian Private Equity Firms: An Overview

Canadian Private Equity Firms – Canada is a mid-market country with mid-market companies. There exists a lot of competition in the private equity marketplace. Pension funds or private equity funds have more capital now than they had ever. There are new entrants with pension funds and a lot of dry powder. 

An average deal size by a private equity buyer was C$ 292 million in 2018. It has doubled to C$600 million in 2019. Onex bought WestJet for C$6.5 billion, Blackstone bought Dream Global for C$6 billion. The deal size is increasing exponentially. 

Look out for these simple tips to Canadian Private Equity Firms, the recruitment process, top PE firms, salaries, and current trends. This might help you to venture into your career over there. 

Working in a private equity firm, Canada

The private equity industry in Canada is different from other parts of the US. Canada has a mid-market for the private equity industry and there are fewer mega-funds. Canada is dominated by pension funds and mid-market PE firms. They might be a spin-off from the merchant banking arms of Canadian banks. 

The working hours last about 70-100 hours per week depending on the size of the firm and funds. Work-life balance cannot be maintained always. As the team might be smaller, Associates have more responsibilities, and juniors play bigger roles. 

The PE firms in Western Canada are focused on energy and natural resources, while the rest of the country is diversified. The total PE deals may account for 200 to 300 per year. The larger firms raise funds denominated in USD as against Canadian dollars due to bigger market size. 

A few of the high-level differences in Canadian deals include less leverage (say 3-4x as compared to 5-6x in the US) and low purchase multiples (deals here have less competition). But there is a collaborative and friendly environment than the corporate raider mentality that is often seen in other parts of the globe. 

If you are interviewing around to gain your career in private equity, know when the concerned PE firm raised funds and be cautious if the firm is struggling or struggled to raise funds. Many of the PE firms fill vacant positions through referrals and hence, high networking is important. 

Attending an interview in a PE firm, Canada

The on-cycle interview session starts from late January to March, while the off-cycle interview session starts after March. It is to be noted that the schedule is not always set. They make quick decisions during the on-cycle process that may last or 3-4 days of the interviewing process. However, off-cycle interviews take time.

Each private equity firm in Canada hires a head-hunter who executes the whole recruitment process. You may not be able to apply through online portals. During the first screening, they might recommend you for the second round if and only if you are the best among the competitors in knowledge, skill, attitude, and willingness. 

There are usually three rounds. They are screening followed by case study analysis or financial modeling skill test, and the final round would be with the partners of the PE firms. As mentioned earlier, candidates with referrals will also get recruited. So, networking is important to get hired in a PE firm, Canada. 

Top private equity firms in Canada

To mention a few of the top private equity firms in Canada, they include TPG Capital, Birch Hill Equity Partners, Crestview Partners, CPS Capital, Franvest Capital Partners, ONEX Partners, Canam Partners, Ironbridge Equity Partners, Hellman & Friedman, Lynx Equity Limited, Novacap industries, Bedford Capital, Nesta Holding Co, Alfar Capital Management, Alaris Royalty Corp., and Peloton Capital Management. 

Private equity salaries in Canada

The city of Toronto, Ontario has the highest pay in salary as compared to other parts of Canada. 

According to PayScale, the salaries are as follows.

An Analyst earns an average of C$49K-C$77K with a bonus value of C$4K-C$10K per annum. The salary for skill due to diligence C$71k. The average salary of Private Equity Associate is C$75,000 with a bonus value of C$78,611. The average salary for a Managing Director, Private Equity Investments in Canada is C$135,000. He earns C$ 30,000 as a bonus and C$22,250 as profit sharing. 

According to, salaries are as follows. 

The average Private Equity salary in Canada is $85,000 per annum or $43.59 per hour. The entry-level professionals earn $45,110 per annum while most experienced professionals can earn up to $135,000 per annum.

ESG as the new ethics in Canadian PE firms 

In the wake of global crises and changing investor demographics, the investment decisions are based on Environment, Social, and Governance (ESG). It is a fast-growing trend in recent years where companies are implementing ethical practices in their operations and becoming socially responsible. 

Some of the ESG factors include:

Environmental: climate change, pollution, conservation of resources, and animal welfare

Social: Employee or human rights, local community interaction, workforce diversity, inclusion, and labor sourcing.

Governance: Executive pay, board structure, code of conduct, and transparency of internal controls. 

Sustainable investing or Ethical investing (SRI) refers to investment decisions by engaging ESG factors. Major Canadian banks are signatories to the UN Principles for Responsible Investment. It includes –

  • Positive screening and impact investing. That is, they focus on the environment.
  • Possess dedicated and responsible investment teams who are ready to offer ESG-specific funds.
  • SRI portfolios exclude alcohol, tobacco, and weaponry. They also avoid countries that disregard human rights.
  • Employ a chief sustainability officer who advises investment due diligence.
  • Ensures that offices and portfolio companies are carbon-neutral.
  • Offer funds to companies focused on sustainable investments. 

The investment fund managers must be aware of ESG reporting, innovative investment tools, and the rise of ancillary ESG services under the growing interest of ESG and SRI considerations. Each of these trends represents a challenge and an opportunity in the private equity industry across the globe including Canada. 

Bespoke advice is needed in the future for every private equity life cycle and the deals. 

The final analysis

As the debt is low, it helps with valuations and deal closures. There is more capital leading to chasing deals. The mid-market players use co-investor money for making larger deals. The Canadian private equity funds are raising higher and they are doing larger deals than smaller ones. 

Valuations are at an all-time high over the last five years. The market seems to be predicted for many years. So, it is high time to start your career in private equity in Canada. 

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