A report by CIBC World Markets says the increased participation of pension funds and private equity funds will spearhead further merger and acquisition activity in the Canadian market.
“In addition to ample liquidity, the emergence of well-financed new players into the corporate market has also bolstered M&A activity,” the report says. “Today’s activity highlights the growing importance of hedge funds and pension plans seeking heightened returns, as well as the presence of foreign state-controlled enterprises and private equity firms.”
The key forces underpinning the recent unprecedented merger and acquisition wave remain in place, including low interest rates, ample cash flows, and strong commodity prices.
“The growing involvement of well-financed private buyout firms, pension funds and emerging market players has also buoyed deal volumes,” states the report. “A continuing high level of activity should help lift the TSX to the 15,000 level by year end.”
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