Canada private equity could see banner 2011

Mon Mar 7, 2011 5:52pm EST
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By Pav Jordan

TORONTO (Reuters) - Canadian private equity is set for another strong year in 2011, driven by dealmaking in its midmarket and an improved fundraising climate, the head of the Canadian Venture Capital and Private Equity Association says.

CVCA President Greg Smith told Reuters that large Canadian private equity players will again turn in a strong international performance.

"I think we'll have growth in the midmarket arena in Canada, but we'll see some of the larger transactions happen on the global arena," Smith said in an interview in Toronto.

About C$4.9 billion ($5 billion) in private equity was invested in Canada last year, the first rise for the asset class in three years, with deals like the Canada Pension Plan Investment Board's C$900 million purchase of a 10 percent stake in the 407 toll highway near Toronto.

The recovery came as confidence returned to the market after the global economic crisis, when dried-up credit markets made it almost impossible to raise new private equity funds.

"With a firming economy, people can be much more comfortable about forecasts than they could have been 18 months ago, and that generates comfort in doing deals" said Mark McQueen, chief executive at Wellington Financial.

Already, more private equity capital has been raised in 2011 than in all of 2010.

Birch Hill Equity Partners closed a fourth private equity fund in February, raising C$1.04 billion to invest in mid-sized Canadian companies.   Continued...