Calgary, Canada, August 24, 2015 --(PR.com
)-- The need for baby boomers to sell their businesses to fund retirement is a financial issue that has received limited media attention to date. However, Equicapita believes it could be poised to become one of the most pressing economic challenges facing the Canadian economy.
According to CIBC data it is estimated that “$1.9 trillion in business assets are poised to change hands in five years — the biggest transfer of Canadian business control on record... by 2022, this number will mushroom to at least $3.7 trillion as 550,000 owners exit their businesses.”
On the other side of the coin the need for investors such as pensions, family offices to generate higher risk adjusted yield is considerable and challenging in todays interest rate environment.
These two forces are helping grow the Canadian private debt market which to a large degree bypasses the traditional commercial and investment banking channels and works with accredited investors via the growing exempt market dealer (“EMD”) segment.
Stephen Johnston, a partner at buy-out firm Equicapita reports, "The alternative market in Canada is moving to fill a capital void and allow non-institutional investors to add private equity offerings directly into their investment portfolios. While this market tends to be focused on commercial and residential real estate offerings there are a growing number of more traditional private equity vehicles such as Equicapita raising capital in this universe. Because of the compelling mismatch between the amount of business owners seeking exits in relation to the amount of dedicated SME private equity capital we believe this space could provide superior returns over the next decade before the imbalance is rectified and the demographic pressures begin to ease.”
Equicapita is a Calgary-based buy-out fund focusing on acquiring Canadian private businesses that can generate strong, sustainable cash flow from their operations in niche markets. Equicapita believes that there are compelling reasons for making private equity investments in the Canadian SME market which is experiencing one the largest generational transfers of wealth as boomer entrepreneurs retire and sell their businesses.
This news release may contain certain information that is forward looking and, by its nature, such forward-looking information is subject to important risks and uncertainties. The words "anticipate," "expect," "may," "should" "estimate," "project," "outlook," "forecast" or other similar words are used to identify such forward looking information. Those forward-looking statements herein made by Equicapita, if any, reflect Equicapita's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those anticipated or predicted in these forward-looking statements, and the differences may be material. Factors which could cause actual results or events to differ materially from current expectations include, among other things: risks associated with the ownership and operation of businesses, including fluctuations in interest rates; general economic conditions; supply and demand for businesses; competition for available businesses; changes in legislation and the regulatory environment; and international trade and global political conditions. Readers are cautioned not to place undue reliance on any forward-looking information contained in this news release (if any), which is given as of the date it is expressed herein. Equicapita undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.