Mercury agrees that Canada’s proximity to the US is a big factor in driving PE money northward. “Going from New York to Toronto or Montréal is not a very difficult exercise,” he says, adding that he spent a decade in New York, mostly as an investment banker.
“We’re basically another state to [the Americans]. Nor can you underestimate the human relationships here. There are lots of Canadians working in New York or LA working on these funds. That has only grown in the last 10 or 15 years, where you have even more Canadians migrate to the US and when coming back here, those bonds are even tighter.”
He adds that the US Funds have “dollars under management that dwarf anything else going on around the world.” With all that “dry powder,” the funds are under “intense pressure to deploy capital in a manner that results in attractive valuations.”
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