52% of Canadian Institutions Plan to Cut US Equity, Against 40% Across North America
More than half of Canadian institutional investors plan to reduce their US equity allocation over the next 12 months, according to a survey of 430 investors who together oversee more than $5 trillion. The Canadian figure is 52%, against 40% for North America as a whole, 33% for Europe, the Middle East and Africa, and 31% for Asia-Pacific. Canadians were 7% of responses, about 30 of the 430 institutions, so the result is a read on direction more than a precise measure of the whole market.
Where the money is heading
The same Canadian respondents are leaning toward real assets and emerging markets. Some 66% plan to increase infrastructure, against 51% globally, and 62% plan to increase emerging markets, against 47% globally. Interest in inflation-linked assets stands at 41.1%, and interest in cash is 37.8%, up sharply from 9% a year earlier. Private markets are already part of nearly every portfolio, with 96.3% of respondents holding them, and 44% say they are pursuing greater selectivity.
The reasons given by North American investors are inflation at 49%, artificial intelligence disruption at 36%, geopolitical risk at 35%, slowing global growth at 34% and interest rates at 32%. The pattern is a defensive one: investors are cutting concentrated equity risk, adding hard assets and holding more cash while they wait.
What it means for fundraising
The numbers sit alongside a run of large Canadian LP moves. OMERS has put a Canada-first venture strategy under new leadership, and CPP Investments recently bought a 27% stake in an Indian hotel developer. Canadian institutions, led by their pension funds, look selective and increasingly drawn to real assets, which favours infrastructure, real estate and private credit managers over managers who need public equity flows.
What GPs should take from it
Infrastructure and emerging markets managers have the strongest tailwind in this data, since two thirds and three fifths of Canadian respondents plan increases. Private equity and venture managers should expect the 44% pursuing selectivity to ask harder questions about concentration, fees and portfolio overlap. A manager that can show a distinct edge, a clear track record and a reason the strategy is not simply US equity beta in a private wrapper will have the better conversation with a Canadian limited partner. The same cautious mood appears in the diversification demand we cover today, and in how foundations are splitting their alternatives.
FundLinx members can see which Canadian LPs are active in infrastructure this quarter.
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