Sell side and buy side
Investment banks are the sell side: they advise companies and sell those companies' shares and bonds to investors. The buy side is everyone doing the investing: pension funds, private equity firms, asset managers, hedge funds, private lenders and venture capital firms. Buy-side professionals decide where the money goes and live with the results, which is why many bankers eventually move there.
Canada's buy side is unusually large for the size of its economy, mostly because of its public pension funds. That makes it a realistic place to start a career, not only a destination after banking.
The Maple 8 pension investors
The Maple 8 are Canada's eight largest public pension investment organisations, together managing more than two trillion Canadian dollars:
- CPP Investments invests for the Canada Pension Plan, which covers working Canadians outside Quebec. Headquartered in Toronto, with offices around the world.
- La Caisse (formerly CDPQ) invests for Quebec's public pension and insurance plans, with a mandate that includes supporting Quebec's economy. Headquartered in Montreal.
- Ontario Teachers' invests for Ontario's teachers and was an early leader in direct private equity investing among pension plans.
- PSP Investments invests for the federal public service, Canadian Armed Forces and RCMP pension plans. Headquartered in Ottawa, with its main business office in Montreal.
- BCI invests for British Columbia's public sector plans from Victoria.
- OMERS invests for Ontario's municipal employees, including through Oxford Properties.
- AIMCo invests for Alberta public sector plans and government funds from Edmonton.
- HOOPP invests for Ontario's healthcare workers.
Other significant pension investors include IMCO, OPTrust and the Ontario Pension Board.
The Canadian model
These funds share what is often called the Canadian model: independent, professional boards rather than political control; large in-house investment teams paid well enough to hire from banks and funds; and a willingness to invest directly, buying stakes in companies, airports, toll roads and office towers rather than only handing money to outside managers. As a result they compete with global private equity firms for the same deals and run offices in places like London, New York and Sydney.
- Private equity
- Buying companies directly or alongside private equity firms (co-investments), plus commitments to outside funds.
- Infrastructure
- Long-term ownership of airports, ports, toll roads, utilities, pipelines and renewable power.
- Real estate
- Often through large owned platforms: Oxford Properties (OMERS), Cadillac Fairview (Ontario Teachers') and QuadReal (BCI).
- Public markets and credit
- Equity and fixed income portfolios, private credit and structured investments. Pension credit teams are among the most solid private credit seats in Canada.
- Total portfolio
- Teams that decide how much goes to each asset class and manage the fund's overall risk.
For students, the key point is that many pension investors run structured internships and new-graduate programs, so you can join an investing team without two years of banking first. CPP Investments, for example, runs an Early Investor Internship that recruits about nine months before its May start, and an Early Investor Program for new graduates that recruits about a year ahead. Interviews weigh investment judgement, markets and case studies as heavily as technicals. See the interview section on the CPP Investments profile.
How a pension deal differs from a private equity deal
A private equity fund usually has a fixed life of around ten years, so it has to buy, improve and sell its companies within that window. A pension fund invests its own long-term capital and pays benefits for decades, so it can hold assets much longer, and it often prefers stable, inflation-linked cash flows such as infrastructure and real estate. In interviews this shows up as questions about long-term value, downside risk and how an investment fits the whole portfolio, not just its return.
Private equity
A private equity firm raises a fund from investors, often pensions, and uses it to buy companies, usually with a lot of borrowed money (a leveraged buyout, or LBO). It works to improve those companies over several years and then sells them. It earns a management fee on the money it manages and a share of the profits, called carried interest, if the investments do well.
- Large-cap platforms: Brookfield, a global alternative asset manager; Onex, Canada's oldest large buyout firm; and Altas Partners.
- Upper mid-market: Northleaf, Novacap, Birch Hill, TorQuest, Clairvest, ONCAP and Imperial Capital.
- Mid and lower mid-market: Sagard, Peloton, Kensington, TriWest, Catalyst (special situations), Ironbridge and Signal Hill, among others.
- Energy and infrastructure: ARC Financial, Waterous Energy Fund, Fengate and StepStone Infrastructure.
- Real estate: pension-owned platforms Oxford Properties, QuadReal and Cadillac Fairview, and managers such as KingSett Capital, Dream, Starlight and Hazelview. Real estate investing combines property valuation, development analysis and asset management: deciding how to lease, renovate, finance or sell each building.
Who actually hires students
Most Canadian private equity deal teams hire associates with two to four years of investment banking or similar experience, not students. Onex, ONCAP, Clairvest, Birch Hill, Northleaf and Brookfield's Toronto investment teams all hire this way; Onex's team pages, for example, show associates but no analysts on its private equity teams. A smaller group does take students or new graduates onto the investment team:
- TorQuest hires juniors as analysts and runs the TorQuest Scholars internship for Black-identifying GTA students.
- Novacap runs private equity internships that can lead to an analyst role. French is expected for roles in its Brossard office.
- Fengate takes summer interns on its Toronto private equity team and runs a two-year Graduate Development Program.
- Sagard, Peloton and ARC Financial have posted student internships on their investment teams.
Junior private equity work centres on new investments: screening companies, building LBO models, running diligence with advisers and helping portfolio companies after a deal. Every BSO private equity profile lists the firm's portfolio companies, which is where to start for 'pick a company in our portfolio' questions, and its Recruiting section says how that firm hires juniors.
Asset managers
Asset managers invest mainly in public stocks and bonds for individuals (through mutual funds and ETFs) and institutions. Large Canadian managers include TD Asset Management, PH&N, Mackenzie, Fiera Capital and Connor, Clark & Lunn, alongside the Canadian arms of global firms. Well-regarded independents include Mawer, Beutel Goodman, Burgundy, EdgePoint, Jarislowsky Fraser and Letko Brosseau. Entry roles are usually research or investment analyst positions, where you build views on companies or bonds and pitch them to portfolio managers. Many people in these roles take the CFA.
Hedge funds
Canada's hedge fund industry is small. Domestic funds include Polar, Anson Funds, Waratah, Turtle Creek, PICTON, Maple Rock and K2 & Associates, plus Sprott, a specialist in precious metals and critical materials. The global multi-strategy funds Citadel, Point72 and Balyasny have Canadian presences but no Canadian student route.
For students, hedge funds are a long shot. The few analyst seats at funds like Anson Funds, Turtle Creek and Waratah tend to go to people who have already done investment banking or a buy-side internship. Waratah's analysts have come through its own co-op terms, and Anson's from banking and investing internships or banking jobs. If hedge funds are the goal, the way there is a student investment fund, an equity research, banking or asset management internship, and a stock pitch you can defend. Sprott is different for anyone with real mining experience, because that experience is the whole conversation there.
Private credit and venture
- Private credit
- Lenders outside the traditional banks, lending to mid-sized companies, private equity-owned businesses and real estate projects. Corporate lenders include Penfund, Crown Capital and Fulcra; Trez Capital and Firm Capital lend against real estate. The pension funds' credit teams are among the strongest places to learn it.
- Venture capital
- Invests in early-stage, high-growth companies, mostly in technology and life sciences. Growth investors such as Portage, Georgian and Inovia are realistic from third year on: Inovia is one of the few that hires new graduates as analysts, and Portage runs paid internships. Seed funds such as Real Ventures and Golden Ventures are small teams that rarely post roles.
How the seats differ day to day
- Pension direct investing
- Evaluating deals, often alongside private equity partners, with long holding periods and a strong focus on downside protection. Hours are generally more predictable than banking, and the scope is global.
- Private equity
- Fewer, larger decisions with concentrated ownership. Heavy modelling and diligence on new deals, then active work with portfolio companies on strategy, add-on acquisitions and financing.
- Asset management
- Researching companies or bonds continuously, writing up investment cases, meeting management teams and defending ideas to portfolio managers. Performance is visible every day.
- Hedge funds
- Like asset management, but with short positions, more trading and a sharper focus on what the market has mispriced and when that will change.
- Private credit
- Underwriting loans: analysing cash flow and downside scenarios, negotiating terms and covenants, and monitoring borrowers for the life of the loan.
- Venture capital
- Meeting many founders, judging markets and teams with little financial history, and supporting a portfolio of young companies.
What buy-side interviewers look for
- Investment judgement. 'Would you invest in this business?' matters more than reciting technicals. Expect to defend a view.
- A real pitch. Have one or two well-researched ideas, public or private, including what would prove you wrong.
- Modelling. Many processes include a case study: a paper LBO, a short model or a take-home exercise with a presentation.
- Fit with the strategy. Know the firm's portfolio, sectors and typical deal size, and be ready to say which past investment you find most interesting and why.
How people move between them
The classic Canadian path is two or more years as an investment banking analyst, then a move to private equity or a pension fund's direct investing team. Transaction services and valuation roles at the Big Four are another route in, especially to mid-market private equity. Other common moves go to corporate development, credit or infrastructure investors, or up the ladder in banking. There are far fewer buy-side seats than banking analysts each year, so the moves are competitive.
That is why student programs at pension funds and the few private equity firms that run them are so valuable: they skip a step. When deciding where to focus, ask whether you want to advise on deals (sell side) or own the outcome (buy side), and which asset class you would happily think about every day.