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LONDON a NEW YORK, November 4, 2022 /PRNewswire/ — For the fourth consecutive year, Dechert is the contributing editor of the International Comparative Law Guide – Special Procedures. The guide, now in its eighth edition, is one of the most comprehensive comparative guides to private equity (PE), serving as a useful reference source for in-house counsel and international legal practitioners, covering common issues in PE laws and regulations – including structural issues, administrative issues, and transactional procedures in 26 jurisdictions.
Members of Dechert’s Global Private Equity practice share the market trends and industry outlook for 2022 and beyond, with relevant country headings United Kingdom a the United States.
2022 and beyond: Human Rights Outlook for 2023
The global PE industry, which is riding a long-term streak in performance that has only slowed since the start of the COVID-19 pandemic on its way to a record 2021, has remained at half first of 2022, despite the coming economic headwinds. . Although the pace of 2021 was different, the PE activity of the American and European sponsors in the beginning of 2022 remained at the historical trends in terms of the value of activities and the percentage of all M&A activity, mostly supported by large-scale PE activity. While global PE fundraising has weakened in the first half of 2022 compared to 2021, fundraising in the US, particularly for equity funds, has remained consistent with previous years, as PE returns currently indicate a more attractive opportunity for investors than the public equity markets.
United States: Special Issue 2022
US PE activity is expected to reach record levels in 2021, with both job volume and job values reaching record highs. Performance in 2021 is due to continued availability of high levels of dry powder, robust fund raising, easy access to credit at attractive rates and strong economic headwinds.
Transactions in the first half of 2022 are relatively light compared to 2021. Macroeconomic and geopolitical factors have created a challenging environment for M&A and challenge the outlook for 2022. Fundraising activity continues in the first half of 2022, but at lower levels than the same period in 2021, and the market is saturated. Many PE firms are raising capital and competing for investments from large institutional investors, many of whom spent all of their 2022 allocations at the beginning of the year.
United Kingdom: Special Issue 2022
According to a report by the British Venture Capital Association (“BVCA”), investment in the UK by BVCA members has increased by 31% year-on-year to £24.7 billion, which 53% can be considered as mega sales. UK fundraising in 2021 reached £16.7 billion across 119 funds. A resurgence in PE activity led to 2020 ending 2021 with record volumes prices and values have been recorded, despite uncertainty due to COVID-19, economic and geopolitical factors.
A notable trend in the PE market between 2020 and 2022 (among many of these trends) is the number of takeovers by PE investors. This reflects the amount of dry powder available in the PE markets and the perceived value of publicly-listed targets.
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