PE deal activity is thriving, and there are record levels of dry powder waiting for deployment, putting pressure on PE firms to diversify and think creatively about their investment strategies. Although the global deal environment has been favorable over the last decade, there are signs of a recession approaching, and the geopolitical environment is fraught with tensions arising from the upcoming U.S. elections; Brexit; and the trade conflict between the U.S. and China. Mergermarket, on behalf of Dechert, recently completed a survey that explores these issues and others that may affect the PE industry in 2020. The results of the survey are presented – along with Dechert’s views on trends and likely developments – in a recent report (Report). This first article in a two-part series summarizes the micro and macro trends identified in the Report, including sponsors’ haste to exit investments ahead of a potential recession. The second article
will describe trends in how funds are being structured in light of macro PE trends, as well as the uptake of PE investing in different global regions. See our two-part series “Dechert Attorneys Consider Impact of the GDPR”: Part One
(Feb. 21, 2019); and Part Two
(Feb. 28, 2019). For additional Mergermarket research, see “Global Trends and Practices in Compliance Due Diligence
” (Aug. 13, 2019).