2021/2022 Private Equity Year-End Review and Outlook

January 2022
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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.