Letter from the Editors
After the private equity industry’s tremendous rebound from the
challenges brought on by the pandemic in 2020, the momentum
continued through 2021. Low interest rates, massive amounts of dry
powder and record fund-raising on both the primary and secondary
markets fueled a torrent of investment activity.
As we begin 2022, the industry’s biggest challenge—aside from intense
competition for deals and increased valuation of targets—is on the regulatory
and legal front. Sponsors face a more hostile antitrust environment, greater
scrutiny over ESG disclosures and deeper probing into their agreements and
operations for conflicts of interest and inappropriate incentives. Sponsors
in disputes with host States arising from European Union cross-border
investments are facing difficulties in accessing treaty protections, and
investors in U.S. healthcare are finding themselves at risk for False Claim
Act suits. All of these developments will require sponsors to focus on the
execution of fundamentals, such as due diligence and compliance controls,
while also ensuring that they provide fund investors with comprehensive
disclosure that accurately reflects their practices and operations.
We hope that you find the 2021/2022 Private Equity Year-End Review and
Outlook to be a helpful guide to some of the key issues now on the private
equity agenda.