International Investments in Private Equity

Chapter 1. Introduction

Chapter Outline

1.1. From a closed to an open market view2

1.2. Private equity fundamentals4

1.3. Global markets and investment flows7

1.4. What’s next?11

1.5. Strategic conversations with general partners12

Private equity is subject to boom and bust cycles. Private equity cycles are driven by both macroeconomic conditions and return expectations by investors. In a downturn, inflows to private equity funds fall, which forces fund managers to be highly selective in identifying the most attractive investment opportunities. As a result, private equity returns tend to rise. However, as returns increase, investors adjust their return expectations and raise their commitments to private equity funds. As more capital chases a finite ...