How to Invest in Private Equity Canada

Dipping your toes into the world of private equity investments can be a thrilling venture. Especially in Canada, where the market offers a robust range of opportunities. As an investment enthusiast myself, I’ve navigated this potentially profitable landscape and so, I’m here to share some insights with you.

Firstly, understanding what private equity is becomes crucial. In simple terms, it’s capital that isn’t listed on a public exchange. These are funds directly invested in private companies or used for buyouts of public companies resulting in their delisting. The goal? To resell them later at a profit.

Now let’s bust some myths right off the bat – private equity investing isn’t just for millionaires or institutional investors anymore. Sure, it often requires higher minimum investments and longer hold periods than traditional forms of investing. But thanks to recent regulatory changes and new digital platforms popping up across Canada, everyday investors like you and me can now get involved too.

Understanding Private Equity in Canada

Let’s dive right into understanding private equity (PE) in Canada. If you’re unfamiliar with the term, PE refers to direct investment into companies that are not publicly traded on a stock exchange. In other words, it’s a way for investors to put their money directly into businesses, often with the goal of helping them grow and becoming more profitable.

Private equity is quite popular among Canadian investors. According to data from the Canadian Venture Capital and Private Equity Association (CVCA), there was an impressive $6.2 billion invested in PE deals across the country during 2019 alone.

Year	Amount Invested
2019	$6.2 billion

So why do folks invest in private equity? Well, there are several reasons:

First off, investing in a business directly can potentially provide better returns than investing through a public market.
Secondly, because these investments aren’t publicly traded, they may offer diversification benefits by being less correlated with public markets.
Finally, many people enjoy having a more hands-on role in their investments.

However, it’s important to note that entering the world of private equity isn’t something that should be taken lightly. It requires significant due diligence and expertise as these investments can be considerably riskier than traditional forms of investing like stocks or bonds.

If you’re considering dipping your toes into private equity in Canada it could be highly beneficial to first gain deep knowledge about this field or work closely with an experienced advisor who can guide you through the complexities.