Global Private Equity (PE) assets under management have been rising in recent years, reaching a new high in June 2015 at $2.4 trillion. A similar trend can be seen in Europe where PE is increasingly considered an important funding channel for businesses in Europe. The outcome of the Brexit referendum appears not to have bucked this trend and business seems to be as usual. Or is it? Although the EU’s free movement of capital will apply to PE houses situated outside the EU – including UK-based PE houses after the UK has withdrawn from the EU – the inevitable regulatory divergence and political uncertainty that Brexit will bring about is likely also to have consequences for the regulatory framework and investment climate in which PE managers operate.
In this Brexit Perspective FTI Consulting assesses the impact of Brexit on the PE industry by taking a closer look at EU regulation of direct relevance for the industry itself, but also at regulation covering the industry’s key investors in the banking, insurance and pension fund sectors. As PE investment does not occur in a vacuum we also touch on other policies that shape Europe’s broader investment climate such as taxation, corporate governance, investor protection and trade.