Letter from the editors
As we enter the second half of the year, geopolitical and economic uncertainties persist and markets around the world have slowed accordingly. While levels of private equity fundraising and M&A activity remained generally high in the first half of the year (although comparatively weaker than in 2021), the macroeconomic environment, volatility markets and increased regulatory oversight present challenges to which the private equity industry will need to adapt. We could see increasing competition in fundraising in the second half of the year as demand for capital from sponsors remains strong, as well as the increasing use of bespoke structures tailored to investors’ needs. and storage vehicles as alternate sources of Capital. Meanwhile, as overall M&A activity slows, we expect continuation funds and fund-to-fund transactions to remain popular. More generally, we expect parties to deploy more creativity in structuring and narrowing valuation gaps in order to complete transactions, including in the secondary market as well as in M&A and long-term financing transactions. leverage.
Regulatory changes also continue to unfold around the world, creating additional compliance obligations for sponsors and impacting transaction execution. We have previously reported on increased scrutiny by US antitrust regulators of the private equity industry (see FTC Focuses on Private Equity and Navigating the dynamic world of antitrust assignments). Additionally, as interest in socially responsible business practices and investments grows, regulators in the United States, United Kingdom, and European Union have issued or already implemented related disclosure proposals. at ESG.
We hope you find the Private Equity Mid-Year 2022 Review and Outlook a helpful reference to the remarkable array of market and regulatory changes currently underway.