SEO meta description: Canada’s CPP Investments is signaling it may walk away from private equity managers that charge fees on co‑investments, as retail capital squeezes traditional LP perks. Here’s what’s changing in private markets—and what it means for Canadians weighing when to start CPP benefits.
TORONTO / NEW YORK — December 12, 2025 — A once-quiet perk of the private equity world is turning into a front‑page dispute: who gets access to co‑investments, and at what cost.
For decades, large pensions and endowments were often offered fee‑free co‑investment opportunities—the chance to invest directly alongside a buyout fund in a specific deal, typically without the extra layer of management fees and carried interest that can erode returns. But that old order is being challenged by a structural shift: private markets are increasingly courting “retail” capital—wealth clients, high‑net‑worth individuals, and semi‑liquid private-market products designed for smaller accounts. [1]
This week’s reporting and analysis suggests the tension is no longer theoretical. CPP Investments (CPPIB)—the arm’s‑length manager of the Canada Pension Plan’s investment fund—has warned that if private equity firms start charging institutions for co‑investments, it will change how (and whether) CPP Investments partners with them. [2]
At the same time, Canadians are having a parallel debate about retirement economics on the personal side: Should you claim CPP as early as 60—even if you don’t “need” the income yet—or delay to 65 or 70 for a higher lifetime payment? Government data underscores that this timing decision has real consequences for monthly income. [3]
Together, these two stories illuminate a single theme shaping retirement in 2025: fees, access, and timing are becoming the new battlegrounds—both for mega‑funds investing in private markets and for individuals planning their own cash flow.
Key takeaways for readers
- CPP Investments is pushing back on the idea of paying fees to co‑invest alongside private equity managers—historically a “no‑fee, no‑carry” privilege for big LPs. [4]
- Retail/wealth capital is changing incentives: with more fee‑generating money to deploy, managers may be less motivated to “give away” co‑invest slots to institutions. [5]
- Some LPs are responding by tightening contracts, using side letters to lock in fee‑free co‑investment terms during a fund’s investment period. [6]
- For Canadians nearing retirement, CPP timing remains a high‑impact decision: starting at 60 reduces benefits, while delaying raises them—yet early claiming can still make sense in specific scenarios. [7]
What co‑investments are—and why the fee fight matters now
In private equity, the standard limited partner (LP) relationship is straightforward: an investor commits capital to a fund managed by a general partner (GP). The GP charges management fees and typically takes a performance fee (“carry”) if returns exceed certain thresholds.
Co‑investments are different. They are deal‑specific allocations—often offered to select LPs—allowing them to invest directly into a company alongside the GP’s flagship fund. For big institutions, co‑investments have traditionally served two major purposes:
- Lower “fee drag.” If the co‑investment is fee‑free (or at least cheaper), it can reduce the blended cost of private-market exposure across the portfolio.
- More control over concentration and exposure. Large LPs can increase exposure to a deal they like, or balance exposures across sectors and geographies.
That arrangement helped cement a long‑running symbiosis: LPs provided scale and stability; GPs offered access and deal flow.
But in late 2025, the economics are shifting. Fundraising has been tougher for several years, and managers are under pressure to sustain revenue while exits and liquidity remain uneven. PitchBook data highlighted in Institutional Investor shows private markets fundraising down sharply from peak levels, even as areas like secondaries and co‑investment funds show growth. [8]
When combined with the industry’s increasingly aggressive push into wealth and retail channels, the temptation to monetize formerly “free” perks becomes stronger.
CPP Investments draws a line: “Fee‑free or we rethink the partnership”
CPP Investments sits at the center of this debate for a simple reason: it is one of the world’s most significant institutional investors in private markets—and it runs an investment model that depends on negotiating the right economics.
CPP Investments reported net assets of C$777.5 billion as of September 30, 2025, with a 10‑year annualized net return of 8.8% and cumulative net income of C$539.4 billion since it began investing in 1999. [9]
In reporting carried by Bloomberg, CPP Investments CEO John Graham indicated that charging institutions fees to co‑invest would affect the fund’s appetite for the private equity asset class, because fee‑free co‑investments have long been part of how large LPs manage costs and scale their allocations. [10]
The implication is blunt: if co‑investments become another fee line item, institutions may either demand concessions elsewhere or allocate less.
That matters beyond the boardroom. A large national pension manager’s cost structure—what it pays in fees, what it saves through direct investing and co‑investing—ultimately affects net returns over decades, which is the horizon CPP Investments is built to serve. [11]
Retail capital is “crowding” the co‑investment queue
A key insight in recent PitchBook commentary (published via LinkedIn) is that traditional LPs have worried retail flows would crowd them out of the most attractive co‑investment opportunities—and that this is increasingly being validated in the market.
The logic is not subtle:
- Retail/wealth products often generate more fee revenue per dollar than a giant pension allocation.
- If a manager can fill a co‑invest allocation with fee‑paying retail money, it has less incentive to offer the same allocation for free to institutions.
PitchBook’s analysis notes that with more fee‑generating capital available, firms can be “less incentivized” to let traditional LPs co‑invest without a “price tag.” [12]
LPs aren’t standing still. One reported defensive move: locking down co‑investment economics contractually. According to the same PitchBook commentary, LPs are using contracts and side letters to secure fee‑free terms for the entire investment period of a fund—essentially trying to prevent the rules from changing mid‑stream. [13]
EQT’s co‑invest fee debate shows how fast norms can change
The potential end of “free co‑invest” isn’t just theory. The Financial Times recently reported that Swedish private equity group EQT has been considering whether to introduce charges for some institutional investors participating in co‑investments, framing it as an opportunity to monetize co‑investment flow as retail/wealth channels expand. [14]
FT’s reporting also points to a two‑tier dynamic already forming:
- Co‑investments historically offered to institutions as a relationship sweetener;
- Retail-focused vehicles that already charge fees on co‑investments.
In other words: institutions may no longer be the only “must-have” client segment. [15]
The bigger wave: private markets go mainstream—and regulators lean in
The co‑investment fee fight is part of a broader phenomenon: retailization, the push to open private credit, private equity, real estate, and infrastructure to a much wider investor base.
A Goodwin analysis published this week described policy momentum across major jurisdictions:
- In the U.S., a White House directive opened the door for 401(k) defined contribution plans to add private assets—potentially including private credit and equity—inside retirement funds available to ordinary investors.
- In the UK, reforms aim to steer pension pools toward a broader mix of assets.
- In Europe, the ELTIF 2.0 regime is designed to channel household savings into long‑term illiquid investment. [16]
Meanwhile, Axios pointed to MSCI launching an index blending public and private equity, designed to incorporate private equity into mainstream benchmarking with a target private equity weight—another sign that private assets are no longer treated as a niche corner of finance. [17]
As private markets approach retail scale, scrutiny rises—especially around valuation practices, liquidity promises, and investor protections. And regulators are clearly watching the private capital model in other domains too: Reuters reported that California legislation taking effect January 1, 2026 will heighten oversight of private equity and hedge fund involvement in health care transactions and governance structures. [18]
This matters for co‑investments because the more retail-facing the ecosystem becomes, the harder it is to maintain “clubby” institutional norms without public and regulatory attention.
Today’s Dec. 12 backdrop: private credit keeps growing, and firms reorganize around it
On December 12, 2025, the Financial Times reported that Apollo Global Management moved its fast‑growing hybrid capital unit out of its flagship private equity division—another signal that private credit and complex lending strategies continue to expand and compete for capital and talent. [19]
Why include this in a co‑investment story? Because it highlights the same dynamic reshaping private equity economics:
- Asset managers are chasing growth in credit and semi‑liquid products;
- Investors are searching for yield and diversification;
- And the industry is continually re‑pricing access, expertise, and liquidity.
That environment makes it more plausible that managers will experiment with charging for what used to be free—including co‑investment access.
What this means for Canadians: CPP investing pressure meets CPP claiming decisions
It’s easy to think of CPP Investments’ private‑equity fee stance as distant from day‑to‑day Canadians. But the retirement system is a chain: what happens in institutional portfolios influences long‑term retirement security, while individual decisions determine household cash flow.
The official CPP basics you can’t ignore
The federal government describes CPP retirement benefits as a monthly, taxable benefit paid for life (if eligible). [20]
Key data points currently highlighted by the Government of Canada:
- Maximum CPP retirement pension at age 65 (January 2025): $1,433/month
- Average CPP pension at age 65 (October 2024): $899.67/month
- Next payment date shown: December 22, 2025 [21]
Those averages matter because many people plan around “the maximum,” but the reality is most receive less than the max.
The math of claiming early vs waiting
Wealthsimple summarizes the core adjustment mechanics most planners focus on:
- If you start CPP at 60, your pension can be reduced by up to 36% (0.6% per month between 60 and 65).
- If you delay CPP to 70, payments can increase by 0.7% per month after 65 (8.4% per year), yielding much higher monthly income later. [22]
MoneySense, using 2025 figures, also underscores the real-world gap between maximum and average payments, reporting the maximum at 65 and an average new pension figure in 2025. [23]
So why do some people argue CPP at 60 can be “best,” even if you don’t need it yet?
The case for claiming at 60—popular in personal finance circles this week—usually comes down to three ideas:
- Longevity uncertainty (the “break-even” problem).
If you don’t live long enough, delaying can mean you collected fewer total dollars over your lifetime—even if the monthly amount would have been higher later. Wealthsimple notes many break-even discussions land in the early-to-mid 80s, though exact break-even varies by individual circumstances. [24] - Reinvestment opportunity.
If you claim earlier and invest the payments (or use them to preserve other investments), you may come out ahead—especially if market returns are strong. This isn’t guaranteed, but it’s part of the argument. - Cash-flow and sequence-of-returns management.
Some retirees prefer to start CPP early to reduce withdrawals from personal portfolios during the first years of retirement, potentially lowering the risk of depleting savings if markets drop early in retirement.
When delaying CPP tends to be more compelling
The argument for waiting (often to 70, or as close as practical) is still powerful for many households:
- CPP provides inflation-indexed, lifetime income—a rare form of longevity insurance.
- A larger later benefit can protect against outliving savings.
- It can reduce anxiety about market volatility in old age. [25]
A practical 2025 note: direct deposit matters
Because the Government of Canada notes potential disruptions due to Canada Post service issues, it also highlights direct deposit as a way to avoid payment delays. [26]
Bottom line: private-market fee pressure is rising—and retirement planning is getting more “price sensitive”
In late 2025, retirement finance is being shaped by a common force at two levels:
- At the institutional level, pensions like CPP Investments are defending fee economics that can compound into billions over decades. Retail capital is altering bargaining power and even long-standing norms like fee‑free co‑investments. [27]
- At the household level, Canadians are re-checking assumptions about CPP timing, taxes, and longevity—because the difference between claiming at 60 versus delaying can materially change monthly income for life. [28]
References
1. www.goodwinlaw.com, 2. pensionpulse.blogspot.com, 3. www.canada.ca, 4. pensionpulse.blogspot.com, 5. www.linkedin.com, 6. www.linkedin.com, 7. www.wealthsimple.com, 8. www.institutionalinvestor.com, 9. www.cppinvestments.com, 10. news.bloomberglaw.com, 11. www.cppinvestments.com, 12. www.linkedin.com, 13. www.linkedin.com, 14. www.ft.com, 15. www.ft.com, 16. www.goodwinlaw.com, 17. www.axios.com, 18. www.reuters.com, 19. www.ft.com, 20. www.canada.ca, 21. www.canada.ca, 22. www.wealthsimple.com, 23. www.moneysense.ca, 24. www.wealthsimple.com, 25. www.wealthsimple.com, 26. www.canada.ca, 27. pensionpulse.blogspot.com, 28. www.wealthsimple.com
