The H1 2026 PE Briefing

Globally, private equity markets have moderated in the first half of 2026 as new and ongoing geopolitical developments are shifting the calculus on dealmaking. However, selectivity, discipline and creativity continue to generate deals, with North America attracting the lion's share of private market activity. At the year's midpoint, there is good reason to believe that the back half of 2026 will see a rallying of activity, especially in select sectors like infrastructure, energy and IT.

In this edition of the Bennett Jones PE Briefing, we provide our analysis and commentary on: the private equity landscape for the first half of 2026; trends in infrastructure investments; how fundraising pressures are shaping mid-market dynamics; and the state of play for secondaries.

Canadian PE Activity

Canadian PE activity experienced a modest contraction phase in the first half of 2026. At the time of publication, aggregate deal value for completed and announced transactions with a Canadian target reached US$22 billion, down slightly from US$23 billion in H1 2025 (see "Canadian PE Deal Activity: Deal Count and Value"). Total deal count was also lower at 122 transactions, with ongoing geopolitical uncertainty and sustained inflation concerns contributing to a risk-off market. As such, exits have been sluggish and the IPO window remains narrow, contributing to persistent fundraising challenges and a focus on secondary buyout options. However, Canadian PE activity remains resilient, with a stable supply of transactions in IT, industrials, and power and utilities; and seven announced or completed deals with values in excess of US$1 billion supporting continued interest in sectors like mining, renewable energy and digital infrastructure. Bennett Jones acted on several of these large transactions, including as counsel to KKR and CoolIT Systems Inc., and is acting for ESAB in their acquisition of Eddyfi Technologies.

Preqin's mid-point data (as at the time of this publication) for Canadian PE shows a market recovering in value while deal count remains disciplined. Full-year 2025 recorded 313 transactions worth US$36.3 billion, down from 352 deals and US$45.4 billion in 2024, consistent with a shift toward fewer but larger transactions. Q1 2026 saw 76 deals totalling US$14.2 billion, up 81% year-over-year, driven by increased large-cap activity. Q2 2026 final figures remain preliminary at 46 deals and US$7.8 billion, and are expected to rise as additional transactions are reported.

Infrastructure: The Right Investment and the Right Time

Infrastructure deals continue to generate strong interest from investors seeking to diversify their risk exposure amid sustained energy price volatility and inflation concerns. Global infrastructure deal activity reached US$85 billion across 405 deals by mid-April 2026, according to Preqin data, with a majority of activity focused on digital and energy-adjacent infrastructure. AI-driven demand continues to highlight the intersection of energy and digital infrastructure assets, as data centres fuel opportunities for power and utility grids, telecommunications and fiber optics, and water infrastructure, among others. A prime example is the recent sale by KKR and Mubadala Investment Company of CoolIT Systems, a leader in advanced liquid cooling used in AI data centers, to EcoLab in a transaction valued at US$4.75 billion. Bennett Jones acted as Canadian counsel to KKR and CoolIT. KKR and its investors achieved a ~15x return in this transaction, inclusive of distributions. LPs continue to look to the infrastructure/data center asset class in the near term, supported by strong growth potential, inflationary protection and supportive public policy signals seeking to attract private investment.

Notably, private investment into Canadian energy projects is gaining momentum as regulatory hurdles are being tackled by governments and a renewed focus on energy security drives investor interest. In particular, Canadian LNG and the supporting infrastructure has significant momentum. In a volatile geopolitical environment, Canada's political and institutional stability and well-developed legal and regulatory environment support investment, a theme we discuss further in our 2026 Mid-year Economic Outlook. Foreign investors are already taking note, with Canada currently ranked as the “most attractive market for infrastructure investment,” according to a survey from the Global Infrastructure Investor Association. The market for so-called HALO (heavy assets, low obsolescence) investments is strong. This is evidenced by several recent Canadian energy transactions including: (1) the acquisition by MidOcean Energy (a LNG company formed and managed by EIG, of an interest in LNG Canada and the North Montney Joint Venture from PETRONAS; (2) Apollo's announced agreement to acquire a 40% stake in Pembina Gas Infrastructure Inc., a premier gas processing entity in Western Canada, from funds managed by KKR; and (3) Shell plc's announced acquisition of ARC Resources for C$22 billion. Bennett Jones acted as Canadian counsel to EIG and Apollo on these transactions. We expect similar playbooks to feature prominently throughout 2026 as the Government of Canada continues to offer tax and other incentives to crowd in private capital and build out national priority projects.

In our work, we continue to see private equity and institutional investors willing to support go-private transactions by rolling equity. For example, the C$1.4 billion acquisition by Cygnet Energy Ltd. of Kiwetinohk Energy Corp. was supported by new equity from NGP Energy Capital Management and Carlyle and a mix of new equity and rollover equity from ARC Financial. Similarly, CDPQ agreed to roll its equity as part of Brookfield's recently announced go-private transaction for Boralex Inc. Bennett Jones acted as counsel to NGP Energy Capital on the equity investment.

Mid-Market Outlook Remains Resilient Despite Headwinds

Despite strong investor interest in large infrastructure-energy deals, there remains a divergence in activity between larger, high value transactions and deals in the Canadian mid-market (i.e., deals involving targets with enterprise values under US$100 million). The velocity of execution for mid-market private equity transactions has yet to fully normalize, particularly on exits of legacy portfolio companies and entries into new platform investments. In response, we are seeing many Canadian GPs focus on buy-and-build strategies, add-on acquisitions and maximizing efficiencies within their existing portfolios.

Furthermore, multiple expansion remains concentrated at the top of the market. The average EBITDA multiple for transactions north of C$1 billion was a healthy 13.8x in Q1. On the other hand, multiples for deals under C$100 million remain around 8.0x, according to CVCA Intelligence. The distinction is meaningful: buyers are willing to pay a premium for large, prized assets but appear more reluctant to extend the same premium for smaller deals. Friction around multiples remains a headwind for many new platform opportunities, particularly in the mid-market. As valuation gaps persist in the mid-market, sellers continue to recalibrate expectations formed in earlier cycles. More than half of PE-backed companies (54%) are now five years or older. The net result is that broad-based improvement remains tempered.

Still, there are many reasons for optimism. The mid-market continues to command a sizable chunk of deal volume, if not notably so in new platform deals. As of May 28, 35.3% of PE activity in Canada (based on completed deals) was for transactions that were under US$100 million in deal size value, according to Pitchbook data. Looking ahead to the second half of the year, we expect the mid-market to continue to improve, although sustained recovery will require further normalization of the exit market and meaningful returns of capital to LPs.

The Secondary Market

The private equity secondary market recorded back-to-back years of unprecedented volume. Global secondary transaction volume reached approximately US$226-240 billion in 2025, up 41-48% over 2024 and more than doubling 2020 levels.

Three structural factors drove such spectacular growth. First, the PE industry continues to face a substantial realization backlog. McKinsey estimates that more than 16,000 PE-backed companies globally have been in portfolios for four or more years, representing over 52% of all buyout-backed portfolio companies. J.P. Morgan puts the collective unrealized value of this backlog at approximately US$3.7 trillion. Second, LPs have experienced four consecutive years of below-average distributions relative to NAV, increasing demand for secondary transactions as a liquidity and portfolio management tool. Third, continued growth in private markets AUM, as projected by J.P. Morgan to surpass US$18 trillion by 2027, has materially expanded the universe of assets available for secondary monetization.

In 2025, LP-led transactions generated US$110-120 billion, representing approximately 54% of total volume, with high-quality buyout portfolios trading at 90-95 cents on the dollar. GP-led CVs reached approximately US$115 billion, up roughly 72% year-over-year. One in six buyout exits now occurs through a GP-led process, and McKinsey estimates that 14% of all sponsor-backed exits globally pass through continuation vehicles, with LPs expecting that figure to reach 29% over the next five years. Thus far in 2026, 27 CV funds closed in Q1 alone. More than half of GP-led transactions in H1 2025 priced at or above par, underscoring sustained competition for high-conviction assets.

Preqin's Q1 2026 Private Equity Quarterly Update confirms that the trend has continued into 2026, with secondaries significantly outperforming the broader PE market. While global PE fundraising totaled only US$155 billion in Q1 2026, down 10% from Q1 2025, and exit value declined 34% quarter-over-quarter to a two-year low of US$96 billion, secondaries funds alone raised US$30 billion during the quarter, representing more than one-third of all secondaries capital raised in 2025. In addition, nearly 78% of secondaries funds closed above target in Q1 2026, underscoring continued investor demand for the asset class.

Looking Ahead

It remains to be seen whether we will see a relenting of geopolitical volatility play a role in encouraging increased PE activity in the latter half of the year. On the infrastructure front, we expect investor appetite for Canadian energy assets to remain robust, driven by AI-fueled data centre demand, supportive government incentives and Canada's standing as a top-ranked destination for infrastructure investment.

The structural case for secondaries through the remainder of 2026 remains compelling. The IPO window has largely been closed, aside from a narrow cohort of marquee issuers, and M&A activity—just as it began to recover—has been tempered by persistent inflation and heightened macroeconomic uncertainty. These dynamics continue to reinforce LP illiquidity and delay the distribution recovery on which primary fundraising depends.

A sustained rebound in broader PE activity will depend first and foremost on a normalization of exits and a corresponding improvement in distributions to limited partners. Until then, secondaries are likely to remain the primary beneficiary of the current environment, with these structural tailwinds further accelerating the adoption of both GP-led and LP-led secondary solutions.

Bennett Jones Private Equity & Investment Funds Practice

The Bennett Jones Private Equity and Investment Funds group is a leader in Canada. Our clients include sophisticated financial sponsors who are looking to balance risk with expected return and who require tailored advice from the initiation of the investment phase through to exit. Bennett Jones represents all sides in private equity transactions, with particular depth on behalf of United States and domestic financial sponsors and Canadian institutional investors. To discuss the developments and opportunities in private equity, please contact one of the authors.

All numbers are according to Preqin data in US dollars unless otherwise stated. PE Deals data is for announced or completed deals where a Canadian company is the target, as of June 19, 2026.