Things change

Alvin Toffler, the futurist and author, once wrote: ?The illiterates of the 21st century will not be those who cannot read or write, but those who cannot learn, unlearn and relearn.?

Confronted with constant regulatory change and the threat of change, good private equity managers need to spend time and effort unlearning and relearning the most efficient ways of operating in regulated markets, or risk becoming ?illiterate? investors.

In this issue of Private Equity Manager, we take a close look at the most important regulatory issues around the world as they affect private equity investment. Most private equity firms need to follow regulatory change in several jurisdictions, such is the global nature of today's investment opportunities.

Starting on p. 19, we take you on a world tour of regulatory ?hot spots.? As ever, in most large markets there loom several potential rule changes that may impact the private equity industry. Many of these changes are the result of political factors beyond the influence of or consideration for private equity. But some changes are a direct result of the fact that private equity now plays a much bigger role in the world economy. Take, for example, looming regulatory changes in South Korea, where tax treaties with a number of off-shore banking havens, including Labuan, may be cancelled specifically in response to a perception among Korean lawmakers that foreign investment houses have exploited tax loopholes while plundering national business gems. Private equity remains a novel model for doing business in many emerging economies, and it is likely that new rules will emerge in the coming years specifically to control (or – dare to dream – encourage) the growth of private equity in these countries.

Elsewhere in this issue you'll find more cutting edge coverage of the state of the regulatory market. Shahin Vallée examines the rules in France with regard to corporate turnarounds. The country has come a long way in promoting capital formation and allowing for the kinds of deal structures that buyout professionals prefer. Yet a battery of rules prevents financial owners from cutting costs through layoffs. No doubt many practitioners in Europe eagerly await an opportunity to unlearn outmoded regulations as these are swept away by private equity-friendly new rules.

All the best,

David Snow Davd. s@us. investoraccess. com