Letter from the Editors
2020 was a year of remarkable resilience for the private equity industry. After every aspect of the industry was upended in the second quarter, sponsors, investors and their advisors quickly adapted, factoring pandemic-related risks into their assessments and settling into a new normal for their business operations. To appreciate the extent of the industry’s agility, contemplate the strong M&A market, the stronger IPO market and the banner year for secondary fundraising and LBO financing—and then consider how unlikely those conditions seemed at the start of the pandemic.
To be sure, there are many unknowns on the long road toward economic recovery. Beyond market conditions, further uncertainty comes from tax policy, regulation and enforcement. The tremendous cost of fighting the COVID-19 pandemic and shoring up battered economies has governments reexamining their tax codes. A new administration in Washington will likely bring more aggressive enforcement of financial, environmental and workplace regulations. In Europe, while funds and investors are generally well prepared for Brexit, the effects of the new EU regulations regarding ESG disclosure remain to be seen.
We hope that you will find the 2020-2021 Private Equity Year-End Review and Outlook to be a useful summary of the uniquely challenging year behind us and a helpful guide in strategizing for the year ahead.