TORONTO — Some of Canada’s biggest pension fund investors are shying away from venture capital after pumping billions of dollars into the risky asset class and failing to generate good returns.

Venture capital investments from Canada’s largest pension funds—collectively known as the Maple 8—peaked in 2021, with the funds participating in 73 direct deals worth a combined US$23.2 billion, PitchBook data shows. Nearly halfway through 2025, the funds have participated in just six VC deals worth US$900 million, down from 24 deals worth US$13.8 billion in all of 2024. 

The pensions’ contributions to other VC funds have also fallen sharply, from 35 commitments in 2022 to nine in 2024, and just two so far this year. 

The collapse mirrors the ebb and flow of overall capital in VC funding, from its pandemic-era heyday to its recent slowdown. While Canada’s big pension funds are often seen as disciplined long-term investors, many of them joined in on the tech buying frenzy fuelled by low interest rates and a rapid push to digitize everything. 

In the years since, venture-backed companies have largely failed to live up to the record-high valuations that investors gave them during that period.

CPP Investments, Canada’s largest pension fund manager, signalled its scaleback from startup investing last month when it announced it will close its San Francisco office by the end of this year. The closure follows a “strategic review of our footprint resulting in the consolidation of U.S. operations under one roof, consistent with everywhere else,” CPP spokesperson Frank Switzer told The Logic. 

“We believe we can effectively engage with this sector through our global offices in New York, Toronto and offices located in our other markets.” Switzer said the fund has expanded its growth equity portfolio—which includes VC investments along with larger private deals—though he did not say what the office closure means for its VC investment levels specifically. 

CPP opened the San Francisco office in 2019 under the leadership of former CEO Mark Machin. The move to the city was meant to bring the fund closer to tech deals and coincided with the launch of its venture capital program. “We are seeing an acceleration of the disruptive trends that have been driving business and societal changes in industries such as health care, e-commerce, mobility, big data and artificial intelligence,” Machin said in remarks on the fund’s 2020 annual results, adding the new office would “help us stay on top of these trends.” 

CPP and other Canadian pensions piled into tech companies around that time, alongside traditional VC investors eager to cash in. Ontario Teachers’ Pension Plan launched a VC arm, now called Teachers Venture Growth (TVG), in April 2019. In 2020, OMERS Ventures, the VC arm of the Ontario Municipal Employees Retirement System, launched a US$750 million fund to back tech bets—at the time, the second-largest VC fund to ever launch in Canada. 

Some of the pension funds’ VC bets have paid off, or appear well on their way to. In 2019, TVG invested in Elon Musk’s SpaceX, for instance, which has since surged in value tenfold to about US$350 billion. Self-driving car company Waymo has added about US$15 billion to its valuation since CPP Investments backed it in 2020. And in 2021, OMERS Ventures cashed in an undisclosed amount when its portfolio company, Wattpad, was sold to South Korean internet giant Naver for US$660 million. 

Other investments, however, have flopped. Both Teachers’ and Caisse de dépôt et placement du Québec got burned on crypto deals in 2022, with TVG losing all of its US$95 million invested in FTX when the fraudulent crypto exchange collapsed, and Caisse writing off a US$150 million investment when crypto lender Celsius imploded. 

Venture investing is inherently risky, and the retrenchment from the business comes as some investors reconsider their exposure to the U.S., where pension funds do most of their VC deals. Caisse CEO Charles Emond said earlier this month that the fund plans to trim its U.S. investments, which make up about 40 per cent of the fund’s $473 billion assets under management. Emond cited U.S. President Donald Trump’s proposed tax hike on foreign investors as a reason to retreat from the market. 

Among the Maple 8, TVG is staying the course on its VC strategy. The fund has increased its venture capital assets as a share of Teachers’ overall portfolio to four per cent in fiscal 2024, up from three per cent a year earlier. TVG executive managing director Olivia Steedman told The Globe and Mail in January that she’s aiming to grow the fund to up to five per cent of the pension’s total portfolio. 

Canadian tech companies, and the investors that back them, have long pressed the Maple 8 to invest more venture capital in Canada. The Canadian Venture Capital & Private Equity Association (CVCA) has said one barrier to investing in Canada is that pension funds are reluctant to write cheques below $200 million. Most companies and VC funds can’t absorb that kind of capital, according to budget recommendations the CVCA sent to the federal government last year. “The end result is that this capital typically flows to the United States, fueling and growing fund managers that invest in American companies instead.” 

Ottawa has tried to make domestic VC investing more appealing to pension funds. Its fall economic statement, released in December, proposed $1 billion in new funding for the Venture Capital Catalyst Initiative, including more enticing terms for pension funds and other institutional investors to participate in the fund-matching program. With the new government in place, it’s unclear if that plan will proceed. “Further details on how the government will support investments in Canadian startups and SMEs will be announced in due course,” said Marie-France Faucher, deputy spokesperson for the Department of Finance, in an email to The Logic. 

CVCA president Kim Furlong urged pensions to “stay the course” on venture capital. “Data shows that the best-performing VC fund vintages emerge during economic downturns or periods of turbulence,” Furlong said by email. “The companies backed by venture capital will continue to disrupt traditional industries and, at scale, create significant value that can help drive Canada’s GDP.”