This article is the fourth in our special report Outlook 2026, which puts 2025 in the rear-view mirror and spotlights challenges and opportunities in the year ahead. See the other articles here.
Private-equity investment continues to have its difficulties, with tariffs, economic uncertainty and a fitful IPO market continuing to bring problematic exit conditions in 2025.
Family offices are nonetheless increasing their exposure to the asset class, experts say, albeit they are expected to target specific sectors and focus on companies in the lower mid-market space to maximize returns in the year ahead.
“Family offices have picked up a lot of the slack from institutions pulling back on PE investing,” says Ash Lawrence, head of AGF Capital Partners, a diversified alternatives business that is part of AGF Management Ltd., an independent asset manager based in Toronto.
A lack of liquidity in the past three years has brought an unprecedented “transaction rut” in the private-equity world that was not expected to continue through 2025, Lawrence says.
There’s a mentality in the private-equity space that it might be a good time to actually put some money to work.
Ash Lawrence, head of AGF Capital Partners
Elevated interest rates have had knock-on effects on fundraising, he says, “which impacts returns, as managers are holding on to assets longer,” while valuations are also affecting liquidity, he says.
“There isn’t yet agreement between buyers and sellers on what value should be,” he adds. Managers have been holding out, hoping that rates or economic growth will get things back onside from a valuation perspective.
Lawrence says transactions were expected to pick up following the 2024 U.S. presidential election.
“There was a lot of enthusiasm that business-friendly, transaction-friendly policies would come into play with the Trump administration,” he recalls. Instead, it brought tariffs that further paused transactions, and while things have opened up slightly, “it’s by no means anything that I would be willing to call a change in the market dynamic.”
Lawrence hopes that, through 2026, “we’ll see ourselves get back to regular transaction volume. But we’re not there yet.”
Time to put money to work?
Those with funds to invest are finding opportunities, he notes.
“There’s a mentality in the private-equity space that it might be a good time to actually put some money to work,” he says. “If you have capital and you can find a transaction, you are likely getting a pretty good deal because the seller is going to need to sell for some particular reason.”
Family-office investors are looking to fill that capital gap, he says.
Indeed, in Canadian Family Offices’ second-annual survey of multi-family offices in Canada, private equity saw a significant uptick among respondents, with 23 per cent of MFOs saying they increased exposures to PE in 2025 compared with last year. Looking at MFOs’ approach to alternatives, when asked which private asset classes they recommend to clients, real estate was the top choice at 87 per cent, closely followed by private equity at 84 per cent. (The study, “The Multi-Family Office Landscape in Canada 2025,” is available to newsletter subscribers and will be released more broadly later this month).
We keep waiting for the system to get some lubricant in it and move forward.
Mindy Mayman, partner and portfolio manager, Richter Family Office
Mindy Mayman, a partner and portfolio manager at Richter Family Office in Montreal, says one reason that interest is growing in private equity among the firm’s ultra-high-net-worth clients is because they often have entrepreneurial roots and a “deep understanding of owning private businesses.” Family offices also take a long-term view of their investments and are rewarded for their patience in PE assets, she says, and “you’re seeing opportunities in the private markets that don’t exist in public markets.”
Interest rate and tariff volatility have been difficult for such investors, “so even though people continue to be interested in private markets, and it’s projected they will have a return premium over public markets, it is challenging to continue investing in an area of uncertainty and where you’re not getting the exits that you would have normally expected,” Mayman says.
“We keep waiting for the system to get some lubricant in it and move forward,” she adds.
Governance and reporting
Colin Keddy, director of TAAG Family Office, an MFO in Ottawa, says 30 to 40 per cent of the firm’s client portfolios have had exposure to private equities for 15 years or longer, although one challenge in the PE space is reporting.
“You don’t have the same level of governance as in other asset classes,” he explains. “It’s critical to create a model of ongoing due diligence for private capital.”
In the current tariff environment, Canadian PE investors are “looking within,” he says, with a focus on “more Canadian-centric deals” in sectors such as precious metals.
Lawrence says wealthy families are looking at PE investments “opportunistically,” meaning they are investing in companies where they have knowledge of the sector.
One trend bringing family offices to PE over the past 24 months is secondary markets, Keddy says, particularly continuation vehicles or general partner-led secondaries, where asset managers bring new investors into a specific asset or portfolio of assets in order to provide liquidity to prior investors who are keen to exit.
What lies ahead?
Lawrence says, “I wouldn’t say things are better, but there are some green shoots where people are somewhat optimistic. That being said, there’s still a lot of macroeconomic questions that will impact whether or not transactions pick up—rates, the U.S. economy, tariffs.”
Another important factor, he predicts, will be the impact of artificial intelligence and data centres. They have reached such a scale “that if that were to turn out to be over-exaggerated and a little bit of a bubble, it would have reverberating impacts on the economy.”
Sectors to watch
Among the sectors that look good to Lawrence in 2026 is health care, which is considered “somewhat resistant in volatile times.”
Industrial buyouts are also interesting given the advent of commercial AI, which “is creating a whole other avenue of value creation within traditional manufacturers,” he says, “versus 18 or 24 months ago, when industrials were pretty out of favour. You may see them come back because of the ability to create value through AI.”
Mayman says that in terms of PE strategies and sectors, it’s important “to focus on companies that are unique in what they do. We’re looking at innovation and disruption, areas that are less sensitive to interest rates—things like health care and technology companies.”
Richter also thinks the AI theme will be big across markets, she adds, playing out in companies from software to financial services.
Keddy suggests that good sectors to look at include purpose-built rental units that can be subsidized by new programs from the Canada Mortgage and Housing Corporation. “I think there’s going to be good opportunity there and in the affordable-housing market overall.”
Investors might also find PE opportunities in the defence industry as the government commits to increase spending and backs up contracts in the sector, Keddy adds. He warns, however, that the “wheels of procurement” can turn slowly for firms that deal with public spending.
Lawrence says there could be a rise in PE transactions in 2026, but “for that to happen, we’re going to have to hope that, at a minimum, the U.S. economy stays relatively healthy.”
Family offices tend to get into private equity when they like the investment or the manager, he says. “It’s not broad-brush investing in PE across the board.”
He notes there’s growing interest in the lower mid-market space, smaller companies with “proprietary deals, where you’re not one of 20 bidders on a transaction, it’s a bilateral negotiation to buy the company from a founder or a family.”
Opportunities in such companies especially appeal to families and small investors, many of whom are entrepreneurs themselves and may be familiar with the industry “so they have a value-add,” Lawrence adds.
“They have a view on why this might be a good investment, versus just listening to an asset manager tell them why it’s a good investment.”
Mary Gooderham is a writer, editor and communication advisor based in Ottawa. She leads Cohen Gooderham Communications and has worked as a journalist for more than 40 years at The Globe and Mail, as a recording officer at the International Monetary Fund and as a custom content creator for online and print media. She’s been a contributing writer at Canadian Family Offices for four years, focusing on investment strategy, trusts, philanthropy, women in finance and estate planning.
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