Private Equity in the United States and Europe: Market and Regulatory Developments

Abstract

A transformation of the private equity industry has occurred in recent years. The financial crisis of 2007-2008 and the sovereign debt crisis caused a substantial decline in private equity activity while a new wave of rules has substantially strengthened the oversight and regulation of the private equity industry. Analysis suggests the effects of market and regulatory developments will be particularly adverse for the European private equity industry. In contrast, private equity activity in the United States is likely to continue its growth aided by the revival of the U.S. economy and the measured approach of U.S. regulators toward the risks posed by the industry. The purpose of this chapter is to offer an analysis of market and regulatory developments in the private equity industry in the United States and Europe in the post-financial crisis era and to provide an assessment of the future of the private equity industry.