Letter from the Editors

Climate-related disclosure rules in both the United States and the EU, as well as greater scrutiny of foreign investment, have further complicated the regulatory environment for private equity sponsors and LPs. In addition to these issues, the Spring 2024 Private Equity Report explores important considerations in transaction agreements and due diligence as well as reasons for optimism in growth equity activity.

• Uptick in Growth Equity Activity Helps Signal a Thaw
  Private equity and venture firms are seeing green shoots in growth-stage companies that have survived the tech downturn and macro headwinds, with investment activity and fundraising in the space both picking up as a result.
• Complying with—and Benefitting From—the EU’s Sustainability Reporting Requirements
  The EU’s Corporate Sustainability Reporting Directive (CSRD) presents numerous challenges for the EU and non-EU enterprises it covers but can also provide valuable insights for affected sponsors regarding sustainability-related risks and opportunities.
• SEC Climate-Related Disclosure Rules: Key Considerations for PE Sponsors
  Although the SEC’s adoption of its long-awaited climate disclosure rules has encountered legal resistance, SEC registrants and sponsors should be aware of its implications for M&A and securities transactions.
• CFIUS Developments and Forecast: What Private Equity Sponsors Should Know
  The Committee on Foreign Investment in the United States (CFIUS) has been increasingly active since the enactment of FIRRMA in 2018—and has begun to closely scrutinize private equity transactions regardless of the nationality of the sponsor.
• FDI Scrutiny of Private Equity Secondary Deals on the Rise
  Regulatory scrutiny of foreign direct investment is expanding in jurisdictions around the world—and turning greater attention to secondary transactions, requiring sponsors and investors to prepare accordingly.
• Putting AI into the Due Diligence Equation
  The accelerating growth of artificial intelligence in business opens up a wide avenue for opportunity and risk—and a new set of due diligence considerations for sponsors, including IP protection and litigation, licensing, data privacy, cybersecurity and the allocation of risk with third parties.
• Management Equity Issues in Continuation Funds
  Continuation funds have become an increasingly popular exit strategy, but they also raise potentially challenging questions and issues regarding how management equity and incentives should be treated in the transaction.
• Choosing Your Battlefield: Selecting the Appropriate Dispute Resolution Process
  In the heat of negotiating a deal, dispute resolution clauses can seem an afterthought. But when a conflict arises, how that clause is drafted can make the difference between effective resolution and a prolonged, resource-draining dispute.