Private equity in the 2020s

In the 2020s private equity (PE) firms responded to the COVID-19 recession with a surge in funding.[1]

The World Economic Forum suggested private equity would fund the post-recession revival of the economy, with patient capital.[2] However, by 2021, statistics show that private equity had increased its management of U.S. corporate equity from about four percent in 2000 to about 20 percent, showing growth at almost five times the U.S. economy. The trend is also noted in the sharp decline of public companies over the past three decades, as thousands transitioned to private with increased investor equity. Law professors, including Elisabeth de Fontenay of Duke University and John Coates of Harvard Law, caution that the trend greatly diminishes corporate transparency and accountability.[3]

Law practices legislation

The States of California, Colorado and Illinois each proposed legislation to limit private equity investor influence on law firms in 2026.[4][5] Colorado passed HB26-1421 on May 12,[6] and Illinois voted for an amended version of its House Bill 5487.[7] California Assembly Bill 2305 passed its House on April 6.[4]

Healthcare sector

By 2024, PE investments into Healthcare facilities boomed, with $100 billion invested in thousands of acquisitions annually.[8]

Hi-tech sector

Following Enron's exploitation of accounting rules of 25 years earlier; several high-value American hi-tech companies, including Alphabet, Meta, and Microsoft, created similar financing vehicles, as variable interest entities (VIEs), to more favorably repackage debt-loads, as they compete to build data centers to deliver AI power to computing, for which Morgan Stanley predicts that the industry will have invested $3 trillion through 2028.[9]

References

1. ↑"McKinsey's Private Markets Annual Review | McKinsey". www.mckinsey.com. Retrieved 17 March 2023.
2. ↑"3 reasons why private equity will enable post-pandemic economy". World Economic Forum. 27 January 2022. Retrieved 27 November 2022.
3. ↑Karma, Rogé (30 October 2023). "The Secretive Industry Devouring the U.S. Economy". The Atlantic. Retrieved 5 June 2026.
4. Jump up to: 1 2Cumming, Chris (1 May 2026). "States Consider Bans on Private Equity Law-Firm Acquisitions". The Wall Street Journal. Retrieved 3 June 2026.
5. ↑Scepanovic, Rachel. "US state moves to curb private equity influence in law firms". www.nonbillable.co.uk. Retrieved 5 August 2026.
6. ↑Siegel, Emily R. (14 May 2026). "Colorado Passes Bill Banning Fee Sharing with Non-Lawyers". Bloomberg Law. Retrieved 3 June 2026.
7. ↑Cumming, Chris (1 June 2026). "Illinois Lawmakers Pass Bill to Bar Private Equity Control of Law Firms". The Wall Street Journal. Retrieved 4 June 2026.
8. ↑"5 Consequences of Private Equity's Expansion in Health Care Services". Center for American Progress. 30 October 2025. Retrieved 6 June 2026.
9. ↑Iacone, Amanda (21 July 2026). "Big Tech AI Spree Revives Accounting Devices That Toppled Enron". Bloomberg Law. Retrieved 21 July 2026.