Private Equity in Canada - Updated

I'm looking to gain more insight into the private equity space in Canada, particularly for Toronto. I understand that there are historical posts addressing Canadian PE, but any updated information would be helpful. Please share any information you find relevant, such as best funds in the space, lifestyle, trends in recruiting or investments, etc.

Some major topics that still remain unclear even when factoring historical posts:
- What's the pay like for associates?
- Hours/lifestyle relative to banking?
- What's the most common path to breaking in?

Comments (26)

Oct 31, 2018

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You're welcome.

Most Helpful
Nov 4, 2018

Answers to your questions are highly dependent on the fund. Based on how you've phrased your post, I'll assume you're looking for more information on the independents that work at the LMM-MM space (Birch Hill, Northleaf, Clairvest, TorQuest, etc.), so I'll try my best to generalize my answers to these types of funds. There's lots of information readily available on this site on the pension funds and Onex-types, which would have more 'conventional' answers to your above points, so I won't touch on these.

Associate Comp: A 2nd/3rd year analyst will take a pay cut when moving to a PE role in Canada. This is second hand so someone feel free to correct me, but most of the funds will pay in and around 150-170K (some, slightly below this) all in for a first year associate role.

Hours: Generally a lot better than IB. If you're on something live you'll be busy, but I've heard 60-65 hours with minimal weekend work as being normal.

Path to entry: Generally most of the better independents hire bankers. You'll see a few people from Big 4 TAS and consulting break in, but generally associates comprise of bankers. I've also seen a few people from corp dev join industry specific funds, but this is less common.

    • 8
Nov 6, 2018

Thank you for the insight.

A quick follow-up - would you happen to know if promotions are common among the independents and pensions? I know most U.S. funds are 2-and-out, but I'm curious if this remains true for Canadian shops.

Nov 6, 2018

Every fund is different, but promotions to senior associate / VP without a MBA are often possible, assuming performance is there and a seat opens up. Ultimately, you're dealing with a very small sample size of relatively small firms so it's hard to generalize.

I can also confirm that practically every Canadian funds apart from Onex pays their associate less than an equivalent banking position

    • 1
Nov 6, 2018

Comp, hours and path seem about right for your typical Toronto first year PE associate at funds other than Onex.

Won't go into comp details, but hours are generally 60h baseline with 70-75h when finalizing bids (although this varies depending on the deal and how prepared you were coming into the finals weeks).

In terms of path, I've seen multiple individuals make it into pension funds and private funds coming out of Big4 and boutiques, but the majority indeed come from banks.

    • 1
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Nov 6, 2018

While the pension funds look attractive with lots of AUM, it's important to note that I've heard anecdotally it's hard to exit. This is because they are large LPs of many PE firms, and many of don't want to risk the relationship. Not to say it's impossible, but something to keep in mind...

Nov 7, 2018

Thank you to all who have shared their knowledge on this topic - this thread has been extremely helpful.

I have some questions:
a. How does the pay scale beyond first year associate? I understand this is likely a difficult question to answer for the independents as they are all quite different, but perhaps the pensions can be generalized?
b. I understand that the most common path to breaking in is by completing a banking stint, but what about the actual method of breaking in? Applying to job postings once they appear? Networking? Head hunters? I'm very interested in hearing what's most common.

Thanks again everyone.

@losing interest @mtnmmnn @CorneliusLux

    • 1
Nov 6, 2018

a. There's a ton of data out there about pension comp. To begin with, all of their senior officers have their detailed comp plans laid out in the annual reports (which are obviously public). Then Glassdoor have quite a bit of detailed info on other levels. One thing to keep in mind though with pension comp, is that bonuses are paid according to group and fund performance (usually a hard hurdle) so given the 10-year bull market, funds have tended to max out their bonus in the last couple years, but it's not a given. Around the last crisis, many funds didn't pay bonuses, some over multiple years.

b. networking (including with head hunters) is always your best bet. the earlier you start the better. Canadian funds don't really recruit on a schedule like US funds do and headhunters won't reach out to entire analysts classes so you have to do a bit more work on your own. Generally speaking, once you see a job posting appear on a Company's website, it usually means the job is already filled so I would not rely on that. PE jobs are rarely advertised (although Canadian headhunters will have a lot / most of their mandates on their website)

    • 3
Nov 7, 2018
mtnmmnn:

.

CorneliusLux:

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Great stuff, thank you both. Very helpful.

Nov 6, 2018

As it was mentioned, penson funds have data out there. Private funds will be quite difficult to look into. Generally speaking, though, private funds will likely be more aggressive than pension funds comps wise.

As for the path, I'd focus on headhunters. There are a few reputable headhunting firms around, so figuring those out and introducing yourself is likely a good first step. Keep in mind that you'll need to stand out from the bunch, so do prepare before contacting them.

    • 1
Nov 7, 2018

Mind naming any reputable HHs?

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Nov 7, 2018

I worked at a Canadian LMM fund. Compensation wasn't the same for everyone. E.g one analyst was making like 15k more than another one. Basically everything was negotiable. If you did well you could ask for a significant raise.

Analyst 70-85K + 15-25K
Associate: 120K +25-40K
VP: ~300K all in + some carry

    • 1
Nov 7, 2018

This is awesome!

Can someone please comment on Oncap and Onex? I'm curious as to whether they recruit more on-cycle and in line with maybe the second tier of US funds? What about comp at Oncap? I realize the fund size is similar to most of the other MM PEs in Toronto (~US$1B), but is their comp at a premium to the other MMs due to them being within the Onex infrastructure? Or do they operate quite independently for the most part?

Nov 6, 2018

Not sure about Oncap but Onex recruits on-cycle (exact same timeline as the MFs and upper-MMs). One thing to keep in mind is that you can only recruit for one of Oncap or Onex. If you strike out at Onex, you can't recruit at Oncap.

    • 1
Nov 7, 2018

Thanks for that - any idea on the delta in comp between the two? Is Oncap in line with the other MMs in Toronto?

    • 1
Nov 7, 2018

As for Montreal, PSP and CDPQ offers internship programs for each semester (4 or 8 months terms). The pay is relatively low (around $20-$25 per hour) and the FT offers % is really different from group to group. It is almost imposible for a graduate to enter as a FT analyst without an internship.
First year analyst comp for ER and PE at PSP and CDPQ are 65k (for summer interns hired the next year) then goes up.

In Toronto, I know that OTTP (Teachers') pays at least 85k for entry level analyst (at least 1year of IB experience), should be the same for CPPIB.
I've heard that return rate (after summer internship) is a bit lower in PE than other group (infra, etc.) because there is less turnover.

PM for more info.

Apr 28, 2019

Would you mind talking more about the comps at PE shops in Montreal and Toronto such as PSP, Novacap and other peers for a 1st year analyst with a Master in Finance but no relevant experience?

Apr 29, 2019
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