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Asset Servicing | October 6, 2025

How Canadian Asset Owners Approach Private Markets

 

Canadian asset owners, led by the Maple 8’s, have always been regarded as being on the forefront of embracing private market investments.

But traction is picking up even further as asset owners across the board aim for even higher private markets allocations. According to Northern Trust’s 2025 Asset Owners in Focus global study, 87% of Canadian asset owners now invest in private markets.

As allocations grow, this introduces new complexities, including opaque valuations, manual administration and heightened transparency challenges, leaving asset owners in search of better tools and deeper insights to manage risk, meet regulatory demands, and grasp portfolio performance.

So how are Canadian asset owners approaching their private markets allocations and the operational handling of these investments? Read on for key themes that emerged from our study and considerations for asset owners to efficiently tackle the challenges of private markets investments.

How Canadian asset owners’ approach private markets investments and servicing

According to Northern Trust’s study, the 87% of Canadian asset owners that invest in private markets have an average private market allocation of 13%. This statistic on its own is striking, but our study lays out a few telling insights on how these asset owners regard their private market portfolios and where they want to take them in the future.

1. Scaling allocations

While the average private markets allocation for Canadian asset owners is 13%, this group named their target private markets allocation as 18%. What could account for the gap between the current and target allocation? Access to general partners (GPs) could be part of it – 62% of Canadian asset owners named access to desirable funds and asset managers as an external challenge.

2. Holding out on private credit

Canadian asset owners’ least invested-in private markets asset class was private credit, with just 29% of asset owners investing in it. For comparison:

  • 89% hold private equity investments
  • 83% hold real estate investments
  • 44% hold infrastructure investments

According to data from T. Rowe Price, private credit has historically provided returns similar to U.S. equities, but with 75% less volatility, so this booming asset class could hold opportunity for those looking to hit higher target allocations for private markets investments. For those Canadian asset owners that do allocate to private credit, our study shows the most popular private credit vehicles as the following:

  • Asset-backed products
  • Senior direct private debt
  • Structured products/preferred equity

3. Hiring talent

Our study shows that 38% of Canadian asset owners employ fewer than five dedicated private market specialists, while 24% employ 6-10. These figures show a noted preference for in-house resources as the industry works to scale up private markets allocations, especially when compared to the U.S.’ approach to hiring specialists – 53% employing 5 or fewer and 19% employing 6-10.

4. Turning to partners

In addition to maintaining in-house talent, Canadian asset owners recognize the value of partnering with service providers to manage the operational complexities of private markets investments. According to the study, 52% of Canadian asset owners currently engage a service provider to support analytics related to private market assets.

As allocations continue to grow, there is likely opportunity to delegate the operational functions to trusted partners, including investor reporting, liquidity management, and operational due diligence.

Operational considerations as private markets allocations keep growing

We’ve explored the insights our study provided around private market investment in Canada, but where might other optimization opportunities for this market exist?

1. Servicing a scaled allocation

As allocations to private markets grow, asset owners face increasing complexity in servicing these investments. This includes managing a larger volume of capital calls, distributions, and bespoke fund structures.

Navigating this heightened complexity requires robust fund accounting systems, automated workflows, and specialized servicing partners who understand the nuances of private equity, real assets, and credit. As a result, outsourcing and technology adoption become critical levers for maintaining efficiency and accuracy.

2. Managing liquidity

Private markets are inherently illiquid, and scaling exposure amplifies the challenge of maintaining sufficient liquidity across the portfolio, including to comply with potentially unpredictable capital calls. Canadian asset owners are increasingly feeling the liquidity squeeze amidst these higher allocations – 38% say liquidity has become more important to their firms over the last 12 months.

3. Competing for quality talent

As private markets become more central to institutional portfolios, the demand for skilled professionals – especially in operations, data management, and fund servicing – has surged. We’ve already established that Canadian asset owners look to retain a higher number of on-staff private market specialists than their U.S. counterparts, but asset owners face stiff competition for this talent from asset managers, fintechs, and service providers.

Where talent attraction efforts struggle, service providers can step in to fill the gaps, allowing a lean operational team to thrive while the middle- and back-office challenges are outsourced to specialized experts.

How partnering can help take asset owners into the next age of private markets embrace

As Canadian asset owners continue to deepen their exposure to private markets, the operational demands of managing these complex, illiquid investments are evolving just as rapidly.

While many institutions are building internal teams to support this growth, our study reveals a clear appetite for strategic partnerships with service providers to tackle the considerable operational challenges that this asset class presents. These partners are increasingly seen not just as vendors, but as extensions of the investment office – offering specialized expertise in areas like analytics, reporting, and operational due diligence.

With 52% of Canadian asset owners already leveraging external support for private asset analytics, the path forward points to a hybrid model: one that blends in-house talent with trusted partners to unlock scale, efficiency, and insight. This collaborative approach will be key to navigating the next chapter of private markets expansion in Canada.

 

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