Challenges for Private Equity—The Shifting Winds of Risk
In his opening remarks at this year’s private equity conference, Michael H. Moskow, president and CEO, Federal Reserve Bank of Chicago, reviewed some recent developments in the industry and related risks. In 2005, the private equity industry continued to grow, mature and become more mainstream. This growth reflects both cyclical phenomena, such as ample liquidity in the financial markets, and structural changes. One structural change is a blurring of the lines between private and public markets, as happened when a prominent private equity firm, Kohlberg Kravis Roberts & Co., raised funds through a large public offering earlier in 2006.