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Authored by Hayden Baker, Bruce Fenton, Matthew Greenberg, and Christopher Miller, from law firm Troutman Pepper.

The Rearview Mirror

Robust multiples and fear that the Biden administration might succeed in passing tax laws resulted in 2021 being one of the busiest years ever in the private equity space. Within the capital markets, while the year was strong, the speculative market cooled off tremendously in the 4th quarter, particularly in pharma and biotech.

Headwinds appeared toward the end of the year as buyer-side representations and warranty insurance (RWI) coverage became tough to get, and very expensive when available, freezing some deals until 2022, and forcing other buyers either to use more traditional approaches to indemnification protection, or to self-insure. While January and February traditionally are quiet, we expect to see accelerated dealmaking later in the first quarter of 2022 as the RWI ice jam thaws and new companies come to market that did not get to market in Q4 2021.

2022's Known Unknowns

Going into 2022, we see several unknowns that may affect deals. Chief among them:

• What legislative changes may come down the pike in 2022 that could impact tax and regulatory considerations, or will the upcoming mid-term elections distract Congress from making any meaningful changes?

• What will the impact be of SEC Chair Gary Gensler's push for increased transparency for private funds? See the latest develo......................

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