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A number of Canada’s biggest investors lost money on their private equity holdings last year as a downturn in the buyout sector continued to weigh on returns at some of the world’s largest retirement funds.
Ontario Teachers’ Pension Plan, which manages C$279bn ($206bn) of assets, and the C$145bn Ontario Municipal Employees Retirement System reported returns of minus 5.3 per cent and minus 2.5 per cent respectively for their private equity portfolios in 2025. For OTPP, it was the worst performance for this asset class since 2008 and for Omers since 2020.
La Caisse, Quebec’s C$517bn state pension fund, also reported weak private equity results. The group said its PE portfolio returned 2.3 per cent last year, well below the 12.6 per cent gain in its benchmark index, half of which is made up of listed stocks.
The Healthcare of Ontario Pension Plan, which published results this week alongside OTPP, reported private equity returns of 3.6 per cent in 2025. Its broader private markets portfolio returned 2.1 per cent, compared with 11.7 per cent for its listed holdings.
“Those are pretty dismal numbers, in private equity returns should be at 15 per cent minimum,” said one Canadian pension investor.
Rising interest rates since 2022 have weighed on private equity investment, with higher borrowing costs hitting dealmaking, returns and exit options.
Canada’s pension system is a major private equity investor with more than 20 per cent of public sector pension money allocated to the asset class, according to think-tank New Financial.
Dale Burgess, executive managing director of equities at OTPP, said private equity investors had been “navigating increased cost of capital, more constrained exit markets and greater operating complexity, creating a drag on returns”.
OTPP’s PE portfolio dropped in value from C$60.4bn to C$50.8bn last year, partly driven by full or partial sales of its investments in insurance brokerage BroadStreet Partners, Indian hospital chain Sahyadri Hospitals and Canadian retirement home provider Amica Senior Lifestyles.
To address the challenges, OTPP said it had made a “strategic shift” towards investing in areas where it believes it has a competitive edge, particularly the financial, services and technology sectors.
Omers said its C$25.6bn private equity portfolio had a net investment loss of C$700mn last year, with challenges in its industrial holdings and “weak performance across our earlier-stage growth and venture portfolios”.
In recent months Omers has announced sales in its private equity portfolio including California-based care manager Paradigm and Toronto-based home care business CBI Health.
La Caisse blamed its disappointing private equity results on “slow earnings growth for portfolio companies and lower multiples in the technology and healthcare sectors”.
Overall returns across the pension companies were boosted by buoyant stock markets last year. OTPP’s total portfolio net return was 6.7 per cent, compared with 6 per cent for Omers and 9.3 per cent for La Caisse.
