Independent asset managers have historically played an important role in delivering differentiated strategies and competitive returns.Nathan Denette/The Canadian Press
Canada’s asset management industry is consolidating, reshaping access to capital. In turn, small and mid-sized asset managers are finding it increasingly difficult to raise capital amid aggressive global expansion into the Canadian market.
According to a report from alternative investment data firm Preqin Ltd., the number of new private market funds closed in Canada in 2024 was at its lowest level since 2014, and aggregate capital raised also reached a 10-year low.
This trend is significant for investors. Independent asset managers have historically played an important role in delivering differentiated strategies and competitive returns. As capital concentrates among fewer firms, investor choice and competition decrease.
Global managers target Canadian distribution
A small to mid-sized, or “emerging,” asset manager is typically defined as a firm overseeing less than US$5-billion in public market assets under management, or less than US$2-billion in private market assets.
In Canada, this category includes a wide range of private equity, private credit and alternative managers, as well as long-established domestic firms that remain small by global standards.
The challenges these asset managers face are structural. Global firms now target not only institutional capital but also Canadian private wealth and retail channels, often partnering with major banks to scale distribution.
In 2022, CIBC Asset Management expanded its relationship with Ares Management Corp. to include private credit strategies. The partnership involved capital commitments and the launch of products that provided Canadian investors access to Ares-managed vehicles through CIBC AM’s platform, giving Ares direct access to Canadian institutional and high-net-worth capital.
In 2025, National Bank Investments Inc. partnered with Apollo Global Management Inc. to launch a private credit fund for Canadian investors, drawing on Apollo’s global origination platform. The fund made institutional-style private credit accessible through National Bank of Canada’s distribution network.
That same year, Blackstone Inc. raised approximately US$630-million for its private equity fund for individual investors, with significant participation from Canadian investors through major wealth platforms, including Royal Bank of Canada. These partnerships show how global managers are gaining access to the Big Six banks’ distribution networks.
Large global asset managers have brand recognition, capital and significant product breadth, allowing them to absorb fundraising risk far better than smaller firms.
For Canadian investment dealers that offer these products to their investment advisors, large global asset managers provide simplified due diligence. One vetted relationship can provide access to multiple strategies across private equity, private credit, infrastructure and real assets. This efficiency disadvantages smaller asset managers that lack the scale to compete for all-important dealer shelf space.
At the institutional level, smaller firms need to compete with ever-increasing personal commitments to fundraising from general partners (GP).
Emerging asset managers are vital to markets
Despite these challenges, emerging asset managers remain vital to a healthy investment ecosystem. According to Preqin, first-time funds across private equity, venture capital, private debt and real estate outperformed established managers in most years between 2001 and 2020, including a 7.9 percentage-point return premium in 2020. Smaller asset managers often pursue focused strategies, operate in less competitive market segments, and avoid the deployment pressure that can dilute returns at scale.
Many of today’s leading global firms began as niche asset managers supported by a small group of early investors. If capital formation concentrates only among the largest firms, innovation stands to suffer.
Investors may gain perceived safety from larger managers, but risk sacrificing return potential and diversification.
Some Canadian firms are adapting while maintaining independence. In 2024, TorQuest Partners Inc., a Canadian mid-market private equity firm with about $5-billion in assets under management, announced a minority investment from New York-based RidgeLake Partners LP. Torquest stated the investment would support its growth without changing its investment process or day-to-day management.
This transaction shows a growing GP-stakes model in which asset managers raise permanent capital for growth, succession planning and infrastructure while retaining control. This approach is becoming more common globally and may become increasingly necessary in Canada.
Minority investments, strategic partnerships and joint ventures can provide small- to mid-size asset managers access to capital and distribution without requiring a full sale to a global platform.
Canada’s asset management industry is at an inflection point. Global firms are investing in local distribution, creating high barriers to growth for Canadian managers.
Consolidation isn’t inherently negative, but a market dominated by a few global players risks curtailing competition and limiting investor choice. Supporting local asset managers is not about protectionism; it’s about maintaining a diverse and competitive investment ecosystem.
The question is not whether global firms will continue to expand in Canada. The real question is whether Canada will enable its next generation of asset managers to grow alongside them.
Joe Millott is a partner at Fort Capital Partners, an independent investment bank specializing in wealth and asset management mergers and acquisitions, with offices in Vancouver, Calgary and Toronto.