Private equity (PE) firms play an increasingly important role in healthcare. Yet, existing research remains uneven, mostly focused on the United States and on certain sectors such as nursing homes. Some geographical areas and health specialties remain under-explored. This brief paper outlines a research agenda focusing on three key issues: (1) PE's significance and (2) business strategies in healthcare, and (3) PE's impacts on health and healthcare. The paper uses primary care in Ireland as an example. The proposed research agenda should improve our understanding of the nature of PE in healthcare and serve as a basis for policy-makers to explore appropriate and effective regulation of PE to reduce its negative impacts if and when they exist.

This article proposes ethical — and legal — accountability for lawyers representing clients such as private equity (PE) firms who create ownership structures for nursing home systems. Using PE ownership as a case study, I will show that nursing home residents are often harmed and Medicaid costs inflated. I propose private law provides tools to compel such accountability, through (1) aiding and abetting doctrines and (2) fiduciary doctrines that require that the fiduciary be responsible for its vulnerable beneficiaries, not just ethically but for damages and equitable relief. I further propose that the teaching of Professional Responsibility needs to be changed to force law students to consider the effect of legal practice on third parties in situations like health care financing.

Defense contractors play an essential role in US security operations. Among other responsibilities, contractors manufacture arms, manage logistics, analyze intelligence, and carry out cybersecurity operations. Historically, defense contractors were either publicly traded corporations or privately owned companies. The past two decades, however, have seen a major shift in the ownership structure of the US defense industry. Private equity firms—once niche actors in the US national security marketplace—have carried out over 1,500 deals involving defense contractors since 2000. This study employs a mixed-methods research design to assess the effects of private equity investment on the financial stability of the US defense industry. Using data on over 8,000 defense contractors, the inquiry finds that contractors with private equity backing experience bankruptcy at higher rates than contractors with no prior private equity investment. In addition, the study evaluates private equity activity in the military satellite services market—a field of growing importance in the strategically important domain of outer space. The inquiry’s findings have notable international security implications. Given the US’ role as a lynchpin in numerous alliances around the world, higher rates of bankruptcy among defense contractors have the potential to affect the security of the United States and its allies.

How do private equity firms decide on a fair price for a business? Drawing on 76 semi-structured interviews, this article contributes to the sociology of finance and valuation studies by showing that pricing companies is not just a valuation operation but also a capital-repartition issue. In so doing, it shows how concrete, local pricing methods contribute to the financialisation of the economy through the creation of a new capital accumulation centre. The article's ethno-accounting approach describes three pricing steps: first, the capital access rules applicable to the private equity firm members (the price rationale); second, the expectations about the capital that can be transferred from the business to the private equity firm (the theoretical price level); and third, the transaction participant coordination mechanisms (culminating in the actual price). This description of the practices and concepts inherent in business valuation sidesteps the traditional divide between price formation in constructivist concepts of value as well as price discovery in substantivist concepts of value. Instead, value is defined as the expectation of a transfer of capital from the productive sphere to the private equity firm.

The years following the financial crisis of 2008 have witnessed a revival of interest in both the Polanyian concept of ‘fictitious commodities’ and the Marxian concept of ‘fictitious capital’. The former, with its focus on the consequences of markets for the ‘fictitious commodities’ of land, labour, and money, appears as a plausible explanation for our present instability along environmental, social, and economic axes. The latter, with its focus on what sets financial capitalists apart from their industrial counterparts, sheds light on what really separates Wall Street from Main Street, and what it all means for the prospects of class struggle in the 21st century. Building on a decade and a half of discourse on the role of these phenomena in financialisation, this paper explores the kinds of limits the law can place on high finance’s most flagrant flights of fancy. Taking as case studies the post-crisis efforts by the European Union (EU) to intervene in two key financial markets – private equity and securitisation – it asks how far current regulatory frameworks go, and what more can be done to protect Europe from capitalism’s excesses.

Treatment of mental illness in the United States is woefully inadequate. One-third of adults report having a mental health condition or substance use disorder, but less than half receive treatment for their condition.

Access is the problem. The U.S. is short on mental health professionals: more psychiatrists are needed and psychologists and social workers are overextended. Proposed solutions are to (1) increase reimbursement rates for psychiatrists and other mental health practitioners, and (2) use a wider range of providers, including nurses and family support specialists—all good ideas. My focus however is on two other forces that are moving into the behavioral health area, offering both financing and technologies to extend the reach of mental health services—private equity and telemental health.

First, private equity firms see high demand in this market. Behavioral health is desperately needed but is highly fragmented and lacking in innovation. Private equity is attracted to outpatient programs that target specific conditions that have evidence-based clinical models—programs aimed at addiction, eating disorders, and autism; these areas require less capital. Federal and state reimbursement is available, some regulations have been relaxed to allow remote prescribing of medicine; and innovative telehealth tools can be used. The problem is that private equity has a poor track record in both nursing home care and behavioral care for teens. The private equity model and its financial incentives are at odds with good care.

Second, telemental health tools, already in use because of the need during the pandemic, appear attractive. These tools require less capital to treat a higher volume of patients and promise much improved access to mental health treatment for populations that could not get such care because of travel distance, costs, and time limitations. The problem is that the telemental health tools have yet to be subjected to evidence-based testing.

My goal in this article is to test whether these two developments – private equity and telemental health —can improve access for patients at an acceptable level of quality. I conclude that both have substantial problems and I offer a range of regulatory approaches to control patient abuses and poor quality.

Private equity funds implement various management and governance practices in firms they endorse, signaling higher quality of sponsored IPOs (Initial Public Offer). However, the participation of such PE funds comes at a cost for newcomer firms, as they may lose both autonomy and future post-IPO earnings. If they do not choose to signal quality through PE funds, the IPO literature points to the validity of other mechanisms, such as the experience and centrality of the board of directors. We theorize and test the effect of the tradeoff between private equity sponsorship and board centrality and experience on IPO performance. We analyzed the effects of signaling on long-term performance through the one-year cumulative abnormal return in Brazilian IPOs issued between 2004 and 2013. Our results indicate that private equity sponsorship is the most effective signal, completely overtaking the relevance of board centrality and experience to explain IPO performance. However, these latter board characteristics significantly affected the performance of non-private equity-backed IPOs. Between PE-backed companies, there is a reverse effect of the board centrality on the IPO's performance and a substitution effect of the board's previous experience with IPO processes.

In this article John Franssen, Head of Research at Travers Smith LLP, gives an overview of what private equity is (including a brief glossary of some key terms), how private equity invests, the type of work lawyers in private practice are involved in and some of the key resources that they need and that are available. This article will also highlight the growing importance of environmental, social, and governance (ESG) and sustainability investment for private equity managers.

For over a decade and for the foreseeable future, federal agencies have made efforts to promote value-based care through various incentive schemes, such as the recent “Regulatory Sprint to Coordinated Care.” Federal incentive schemes and other “macro tailwinds” have brought in private equity investors, especially in the context of primary care for Medicare beneficiaries. Oak Street Health and its private equity backers were pioneers in this space, applying buy-and-build strategies to create “next-generation” primary care networks “that focus largely or entirely on Medicare Advantage enrollees.” Although Oak Street Health persuasively established a workable “playbook” for private equity investment in value-based care, and forecasts have been favorable, the ultimate market viability of this value-based playbook hinges on whether or not private equity investors can locate corporate buyers. The market viability of such a strategy has now been reconfirmed by the acquisition of Oak Street Health by CVS Health (“CVS”), announced February 8, 2023, and closed May 2, 2023, especially given that the incentives and the efficiencies associated with this deal are likely to be applicable to large-scale vertically integrated “payvider” corporations more generally. This Recent Transaction Comment examines CVS’s acquisition of Oak Street Health to consider what factors might lead vertically integrated health care corporations to acquire value-based primary care networks in the future, and what knock on effects such acquisitions might have on future private equity buyouts in health care.

Since 2001, public-pension plans have increasingly relied upon alternative investments (AIs). We examine the impact of this trend on investment performance and the factors that led to the reliance on AI. Using data from 92 largest plans 2001–2014, we found AI, especially private equity, generally had a positive effect on investment performance, but the effect was small and unsustainable. We also found that plans with a lower funded ratio and higher investment return expectation were more likely to allocate more assets to AIs. These findings suggest that the prospect of relying on AIs to meet investment return expectations remains a long-term challenge for state and local governments.

Although the legality of equity-based crowdfunding was determined from a judicial point of view in the “first crowdfunding financing case” in 2015, there is no formal law, regulation, or rule released to regulate the crowdfunding financing. From a micro-perspective, determining the nature and workings of equity-based crowdfunding are two preconditions for determining the legal framework for and supervision of equity-based crowdfunding. The “Open, Public, Small-sum” characteristics defined the nature of public offering to the equity-based crowdfunding; therefore, it should be distinguished from private equity financing as a different category of online equity financing. Based on the original purpose of “financing facility” and the nature of “grassroots finance,” fundraisers shall enjoy exemptions on small sums, and the threshold of investors shall also be appropriately restricted, while the intermediary platform shall be the regulatory focus. From a macro point of view, the supervision of equity-based crowdfunding should seek a balance between “financial innovation” and “risk control.” Equity-based crowdfunding should not simply be considered a financing method. Rather, its positive effects on mass entrepreneurship and innovation should be emphasized so as to make it a particularly important “booster” to promote economic and social development.

In the fifteen year period to 2008, the private equity industry grew enormously in Europe, to the point where it began to be seen as a rival to the public markets. This gave rise to concerns and calls for the private equity industry to be regulated. The financial crisis, and in particular the contraction of the market for debt prompted by the collapse of Lehman Brothers in September 2008, has led to a significant reduction in the number and value of private equity deals. However, if anything, the financial crisis has led to increased calls for regulation of the industry. This paper examines the development of private equity transactions in Europe, and analyses the nature of these transactions. It then considers whether the concerns raised in relation to private equity are justified. Broadly, the arguments in favour of regulation of private equity may be divided into two kinds: the need to increase transparency in the industry by imposing disclosure obligations, and systemic risk concerns. These arguments are considered, and the terms of the Alternative Investment Fund Managers Directive (AIFMD) are examined in the light of these issues. It is argued that the arguments in favour of regulation of private equity are weaker than has been suggested and that this Directive does not adequately differentiate between hedge funds and private equity when imposing this regulatory regime.

This article examines the recent development of EU regulatory policy with respect to the alternative investment industry up to and including the adoption of a major new Directive. This Directive is just one part of a much larger package of new EU measures relating to the financial markets but its emergence merits being singled out for three reasons. First, the account of how it came about and what it sets out to do touches upon two overarching concerns that are frequently expressed about laws that are made in the immediate aftermath of a crisis: opportunistic use of crisis situations to achieve unrelated goals, and crisis-induced regulatory overreaction. Second, with the regulation of alternative investments being addressed internationally as well as in Europe, close examination of this area provides revealing glimpses of ways in which key players in the EU policy formation process have simultaneously used the financial crisis to exert influence internationally and used international developments to further an internal agenda. Finally, out of the exceptional level of controversy that surrounded the legislative process for the Directive come some important insights on relations between the EU Institutions and, in particular, on the European Parliament's increasing deftness in putting its mark on EU financial market regulation.

This article describes compensation contracts in private equity. It shows that they may not align interest between the investors and fund managers as much as commonly thought. Certain clauses appear as potentially hazardous for investors and others exacerbate conflicts of interest.

Private equity has become a multi-trillion dollar business in recent years, but its rapid growth has been accompanied by public controversy and calls for regulation. I review the policy debate, from voluntary best practice codes of UK private equity firms to proposals for supervision and control by continental European socialists, and analyse the economic case for regulation. I find little evidence of market failure and strong arguments for private ordering by investors, banks and labour unions, who appear to have both the ability and the incentives to safeguard against managerial conflicts of interest, excessive debt and other maladies. In contrast, it is doubtful whether politicians have sufficient information to fine-tune activity in this area, and more or less unpredictable policy changes may cause significant harm to business confidence. Altogether, the case for regulation is weak. However, if political pressures to ‘do something’ are overwhelming, as they currently appear to be, greater disclosure and transparency may be the least costly alternative.

Hedge funds and private equity increasingly play an important role in the financial services industry and corporate governance in Europe and the United States. Activist hedge funds and private equity firms have developed similar investment strategies that are designed to influence the corporate governance and organisational structure of publicly listed companies. A large number of hedge funds, for example, have adopted an investment strategy to accumulate large positions in publicly listed companies, using their ownership positions to engage in monitoring of management. Activist hedge funds often make direct interventions in the corporate governance of target firms, confronting management teams by demanding specific actions, such as changes in management, company capital structure, dividend policy and company strategy, in order to increase shareholder value. The investment strategy of private equity buyout funds is to target publicly listed companies which they can take private for a period of restructuring and governance changes. Eventually, the firm will either be returned as a publicly listed company or be sold to a strategic buyer or another investor. Activist hedge funds and private equity firms have recently come under scrutiny by regulators who are concerned about the effect of the strategies used by these funds on the companies in which they invest and the capital markets in which they operate. Existing accounts focus on the mechanisms in corporate law, taxation and labour law to address current practices of hedge fund and private equity firm managers. We examine the circumstances where direct government regulation could be supplemented with a mix of self-regulatory and co-regulatory strategies. We conclude by analysing the various regulatory responses to the propensity of activist hedge funds and private equity firms to act in concert and assess whether the reforms will have practical significance.