Letter from the Editors

The year 2023 is now squarely in the rear-view mirror, with the private equity industry leaving behind it a year marked by high interest rates, challenging conditions in both fundraising and financing, and a muted M&A market around the globe. In this difficult environment, the industry found opportunity where it could with creative deal structures that limited the need to access the debt markets, bespoke financing solutions from an expanding pool of alternative capital providers and a rapidly evolving private funds transactions arena.

While by all accounts the industry has adjusted to this new normal, there are signs that the clouds are parting. Interest rates have peaked, inflation has receded, the “soft landing” seems to have been achieved, and there is increasing expectation that 2024 will see more robust M&A markets.

If there is guarded optimism on the macroeconomic front, however, regulations continue to generate new hurdles. The SEC’s new Private Fund Adviser Rules introduce a regime that goes beyond anything contemplated since the 1940 Advisers Act, while the agency is taking a stringent approach to enforcing the Marketing Rule. New rules on everything from ESG to predictive data analytics are in the pipeline. In both the United States and the European Union, regulators are focusing more and more attention—if not outright hostility—on mergers, while in the U.S., noncompete agreements have come under sustained legislative attack.

The 2024 Private Equity Outlook summarizes how these developments—both favorable and less so—have unfolded to set the stage for the year ahead. We hope that you will find this to be a useful guide as you chart a course through this varied landscape.