In a recent fireside chat, Michael Fieweger, a partner at Baker McKenzie and chair of the North America private equity practice, shared his insights on the evolving regulatory landscape for the private equity industry. With over 30 years of experience, Fieweger discussed the unique challenges and opportunities facing the sector today, especially in light of recent economic shifts and regulatory changes.

Key Topics Discussed:

Evolving Regulatory Landscape: Fieweger highlighted the significant changes in regulatory regimes affecting private equity markets, comparing the current landscape to the period following the 2008 financial crisis. He emphasized the dynamic nature of private equity within the M&A landscape and noted the global scope of Baker McKenzie’s work in navigating multi-jurisdictional private equity deals.

Market Cycles and Economic Impact: Reflecting on his extensive career, Fieweger shared insights into the cycles he has witnessed in the private equity space. He discussed the unprecedented challenges brought about by COVID-19, inflation, and interest rate fluctuations, noting their impact on deal-making and market stability.

Regulatory Focus Areas: Fieweger outlined three main areas of regulatory scrutiny for private equity: fund level regulations, deal-making processes (including antitrust and foreign direct investment reviews), and regulations affecting portfolio companies’ operations. He specifically pointed out the heightened scrutiny in technology and healthcare sectors.

Antitrust Concerns and Enforcement: The conversation delved into the shifting focus of antitrust regulation from consumer harm to broader market harm theories. Fieweger expressed concerns about the uncertainty this creates for deal-makers and the particular challenges faced by private equity in navigating these regulatory waters.

Operational and Strategic Aspirations: As the chair of private equity for North America at Baker McKenzie, Fieweger shared his aspirations for the firm to be a key partner for clients, leveraging their global presence and expertise in value creation, particularly in carve-out transactions and operational excellence.

Personal Satisfaction: On a personal note, Fieweger finds the most satisfaction in seeing the growth and success of individuals he has worked with over the years, alongside the excitement of closing deals and acquiring new clients.

Throughout the chat, Fieweger provided a comprehensive overview of the current state of the private equity industry, emphasizing the importance of adaptability, strategic foresight, and regulatory compliance in achieving success in today’s complex and rapidly changing market environment.

Key timestamps:

00:09: Introduction to ION Influencers’ Fireside Chats
00:58: Impact of Market Changes on Private Equity
02:07: Challenges and Opportunities in the Current Cycle
03:21: Market Uncertainty and Client Sentiment
05:27: Regulatory Issues and Deal Review
09:46: Impact of Regulatory Changes on Fund Formation
12:07: Compliance Costs and Impact on Returns
12:59: Considerations for Exits and Fundraising
15:35: Client Concerns and Market Stability
17:21: Geopolitical Concerns and Client Decision-Making
19:27: Increased Due Diligence and Regulatory Considerations
20:59: Expanding Regulatory Impact Beyond Traditional Sectors
22:06: Regulatory Scrutiny
24:23: Challenges for Regulators
25:18: Challenges for Private Equity
26:06: Changing Deal Making Process
26:26: Shift in Perception of Private Equity
27:34: Antitrust Considerations
27:57: Aspirations in Private Equity
28:30: Value Creation in Private Equity
29:26: Trends in Private Equity
30:20: Focus on Carve Out Transactions
31:19: Expertise in Deal Making
31:44: Personal Satisfaction