$360 Billion of Private Credit Exposure in Canada, Mostly in the US

Canadian financial institutions and investment funds have accumulated around $360 billion in private credit exposure, primarily in the United States. According to research from the Bank of Canada, pension funds and insurers are driving this activity, with large Canadian pension funds holding approximately C$215 billion (around $160 billion) of private credit at the end of last year, accounting for about 9% of their invested assets.

The three largest life insurers in Canada held just over C$200 billion in private credit in the first quarter of this year, equivalent to around 22% of their invested assets. The research used a broad definition of private credit that includes any loan or similar credit product from non-banks to businesses.

Private credit accounts for about 15% of the credit liabilities of Canadian private non-financial companies, which is slightly lower than at the time of the 2008 financial crisis. In contrast, in the US, private credit firms have increasingly competed with banks and broadly syndicated loan markets to finance leveraged buyouts and other corporate transactions.

Canadian investment funds held about C$54 billion of private credit in 2025, an increase of more than 60% since 2020. However, this represents only around 1.5% of Canadian investment funds' total net assets.