Canada’s venture capital industry may be struggling, but the buyout business is performing in line with the rest of the world, says Canada’s Venture Capital & Private Equity Association.

According to the CVCA and its research partner, Thomson Reuters, there were 28, completed and pending, buyout transactions in Canada in the third quarter, which is down from the 40 transactions reported in the third quarter of last year. Canada is now on pace for 99 private equity buyouts for the whole 2009 year, down from the 120 buyouts recorded in all of 2008.

On a value basis, buyout investment was just over US$2 billion in the first nine months of the year, down sharply from US$8.5 billion in the first nine months of 2008. However, this slide in buyout investment was mirrored by the rest of the world, they said, as buyout investment worldwide totaled only US$81.3 billion in the first three quarters of 2009, down from US$218.4 billion in the same period last year.

“This data shows that Canada’s buyout industry is performing in line with its peers globally,” said Gregory Smith, president of the CVCA.

Buyout fundraising also continued at a reduced pace in the first three quarters of 2009, with Canadian buyout funds raising only $649 million in the period, the CVCA said. However, it notes that this comes after three years of strong fundraising activity with $9.4 billion, $4.5 billion, and $5.6 billion raised in 2006, 2007, and 2008, respectively.

“As a result of this strong fundraising in recent years, Canadian funds still have considerable available capital to deploy as compared to funds in other regions,” it says.

IE