EP98: Challenges in international private equity

Turbulence in U.S. credit markets is expected to reduce the size and number of private equity (PE) deals in developed economies, as debt for leveraged buyouts becomes scarcer. Despite this, PE continues to face a surplus of capital chasing fewer attractive deals, driven by fewer undervalued companies and limited growth opportunities in mature markets. While Asia and other emerging regions account for a small share of global PE activity, their large economies and higher growth rates present long-term potential. However, expansion into these markets is constrained by limited reliable information, weak regulatory oversight, scarcity of experienced local management talent, and underdeveloped exit mechanisms. Overcoming these barriers requires deeper local knowledge, primary data-driven due diligence, access to strong local management networks, and carefully planned exit strategies that account for regulatory volatility. Going forward, PE activity is expected to shift toward smaller, niche international deals, with firms adapting their due diligence models to better manage emerging-market risks.