New regulations' effect on fundraising and deal flow for Swedish private equity funds

Abstract: The objective of our thesis is to map the regulatory landscape and discuss its expected impact on fundraising within the Swedish private equity market. Solvency II, Basel III and AIFMD are about to be implemented into European and national legislations. In order to understand the impact from these regulations on private equity fundraising, interviews have been conducted with some of Sweden's most prominent private equity fund managers and investors. We find that the Swedish fund managers and investors expect these regulations to have wide implications for future fundraising. We therefore expect the new regulatory landscape to affect the whole private equity value chain including investors, managers and their funds and portfolio companies. Although the AIFMD will increase costs and the administrative burden, Solvency II and Basel III/CRD IV are expected to have a more severe impact on fundraising and deal flow for private equity firms. In conclusion, no private equity firm or investor will be completely unaffected as the regulations come into force.