Private Credit Growth in Canada: Opportunities and Risks

The private credit space in Canada is on the rise, but there’s still a big gap compared to what we see in the U.S. and Europe. When you look at Canadian portfolios, there’s a much smaller allocation to private credit than in other markets. That’s where I see real opportunity for growth.

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In the U.S., private credit has become a standard part of many portfolios. Large institutions and family offices have been using it for years, and the results speak for themselves. But in Canada, it’s still relatively new for most investors, especially retail investors. There’s a lot of hesitation around liquidity, which makes sense given some of the high-profile failures we’ve seen in the space. But those are exceptions, not the rule. The key is finding the right managers and the right funds that understand how to manage liquidity and mitigate risk.

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Another factor driving growth is the entry of large U.S. firms into the Canadian market. These firms see the same opportunity that we do—a chance to fill the gap between how Canadian and U.S. portfolios are structured. They’re bringing in experience, capital, and proven strategies that could help drive more interest in private credit here. I welcome them all!

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The bottom line is this: Canadian investors and their advisors are slowly catching up to the idea that private credit is not just an “alternative” anymore—it’s becoming an essential part of many modern portfolios. As this space grows, it’s worth considering how private credit might fit into your own long-term strategy. Take the time to explore your options and talk to advisors who can guide you through the process.

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Contact Michael Steepe for more information!