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2025 Highlights
In a year marked by volatility driven by trade uncertainty, supply chain disruptions, and the ongoing U.S. tariff negotiations, companies continued to look to the private debt markets as a source of stable and long-term focused capital. Lending activity across our two West Coast offices remained strong, and our team was excited to close on 4 new relationships while also continuing to support our existing clients with a range of capital solutions. Deal flow continued to be spread across different asset classes, and capital was utilized for a broad range of transactions including M&A, recapitalizations, refinancings and growth.
The initial optimism of the year gave way to market caution following the first April tariff announcements. Many businesses paused to evaluate their risk and strengthen their supply chains, leading to a significant downturn in activity. However, by the end of the third quarter, deal appetite began to return as companies adjusted to the new landscape of trade uncertainty.
For the West Coast offices, adaptability was a defining theme of last year. Our experience in various financing types and structures, as well as our capacity to adjust to shifting borrower needs, played an important role in driving our activity as market conditions evolved. In addition, our ability to provide multi-currency funding, with Canadian dollar transactions being particularly prominent, were a key factor as well.
Private Placements
Private Placement activity in 2025 was predominantly direct, but our group did selectively participate in a limited number of syndicated processes. We saw robust demand in the heavy equipment space and expanded relationships with clients across a range of other industries including forest products, tank and equipment rental, linen services, food and beverage and maritime construction. Given the market volatility, clients relied heavily on accessing shelf facilities, which allowed for quick access to long-term capital during periods of more favorable rate conditions.
Direct Lending
In general, sponsored deal flow remained stronger than non‑sponsored opportunities, which tend to fluctuate more in line with the broader macro environment. We saw fewer opportunities to finance new LBOs; in contrast, repricings, refinancings, and recapitalizations were more frequent. In the second half of the year, we observed a notable demand for re-pricings as spreads tightened and rates declined. Despite heightened market caution around discretionary, cyclical, and project‑oriented sectors, companies with meaningful equity sponsorship and low tariff sensitivity continued to successfully complete transactions.
As we closed our flagship $4.2bn direct lending fund during the summer of 2025, we remained very active and competitive in deploying capital, achieving our second-best year on record.
Outlook for 2026
We are optimistic that 2026 will be another strong year on the West Coast. If broader market conditions remain stable, the momentum that began building in late 2025 is expected to convert into deal execution over the course of the year.
Many deals completed over the past six years are now reaching maturity, and will necessitate refinancing in 2026. We will be implementing strategies such as currency diversification, tailored maturities, amortization adjustments, and other structural enhancements to help borrowers manage the elevated rate environment. In addition, we’re preparing to support financing needs tied to rising M&A activity and growing capital investment prompted by new depreciation incentives.
Even as macroeconomic risks persist, including geopolitical tensions, policy changes, and the uncertainty around interest rates, we anticipate demand for innovative capital solutions to remain strong across sectors. We feel our established relationships and flexible funding strategies effectively position us to meet borrowers’ evolving needs in the year ahead.
Sponsor activity is expected to increase in 2026, as we are already seeing signs of acceleration. We closed a sizeable sponsor-backed transaction in Q1, and we anticipate more opportunities as the year progresses.
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