Ten years ago, the private-equity and venture-capital industries were still digging their way out from under the recession sparked by the collapse of the Lehman Brothers Holdings Inc.

A decade later, how things have changed! Both industries have become increasingly important contributors to the global capital markets, a development that has earned them much public scrutiny. In this special report, we examine some of the forces shaping both industries as they enter a new decade, from the push to open the asset class to retail investors to the potential effects of a presidential election on deal activity. Some of the industry’s top deal makers, fundraising professionals and venture capitalists also share their thoughts on the challenges and opportunities they see in the year ahead.

We hope you enjoy this special outlook-themed coverage...

Regulators could lift the velvet rope keeping ordinary investors out of private equity in 2020, and for the first time in the industry’s history, firms may soon have the choice to let mom-and-pop investors into their funds, WSJ Pro Private Equity's Chris Cumming reports. But firms that choose to do so will have to seriously boost their internal systems—and get comfortable with a host of new risks, say legal and operational experts. Over the coming year, the Securities and Exchange Commission is expected to release a draft rule that would expand access to private funds for so-called retail investors, or people who don’t meet the current income and wealth requirements for private investments.

Secondary buyers are getting pickier about the deals they choose to pursue as the industry heads into 2020 and the volume of assets hitting the market continues to swell, WSJ Pro's Laura Kreutzer reports. Almost all of the investors and secondary-market intermediaries interviewed by Private Equity Analyst said they expect deal volume for 2019 to exceed $90 billion. That would comfortably surpass the record level of 2018, for which estimates range between $70 billion and $80 billion.

Over the past several years, investors have poured record amounts of money into private-credit funds, attracted by the promise of higher returns and lower volatility, WSJ Pro's Laura Kreutzer reports. But as the market enters 2020, investor enthusiasm for the asset class is tempered by growing concerns that a recession may be drawing closer. “More private-debt investors are cutting back or planning to cut back on their allocations,” said Mark Hindriks, investment professional at secondary firm Coller Capital. “They worry about how these funds will perform going forward and are thinking of things such as an increase in default risk.”

Now that natural gas has replaced coal as the fuel of choice for electricity generation in the U.S., private-equity firms are betting that it will remain an important source of power—and profits—for years to come, Luis Garcia reports for WSJ Pro. Energy-focused private-equity firms are raising capital for their power play and investing in gas-fired plants, even though some industry experts warn that these plants are threatened by easy access to affordable renewable energy. As the clean-energy industry lacks storage technologies that can totally balance intermittent solar and wind energy, private-equity firms believe they are on solid ground for now.

A new breed of diagnostic companies is rolling out technologies to tackle a growing and deadly health-care problem: antibiotic-resistant bugs, WSJ Pro's Brian Gormley writes. More than 35,000 Americans die annually from drug-resistant bacterial and fungal infections, according to a November report from the Centers for Disease Control and Prevention. And 270,000 people die annually from sepsis, an overwhelming response to an infection, according to the National Institute of General Medical Sciences. CDC’s report highlighted the urgent need for new tests to detect drug-resistant infections earlier and determine different drug treatments.

Private-equity firms tapped the brakes on deal making in 2019, but industry experts say some firms are likely to hit the gas again in early 2020 in an effort to get deals done before the next U.S. presidential election, Laura Cooper reports for WSJ Pro. “Some are saying, ‘We won’t want to sell in the second or third quarter,’” said Uri Herzberg, a partner on both the merger-and-acquisitions and private-equity teams at law firm Debevoise & Plimpton LLP. “Many are starting now so the election overhang isn’t in everyone’s mind.”

Ten years ago, the private-equity industry was wrestling with fallout from the global financial crisis and the 2008 collapse of Lehman Brothers Holdings Inc., according to WSJ Pro's Laura Kreutzer and Ted Bunker. Deal making had slowed from a 2007 flood to a 2009 trickle, while fund managers faced pressure from limited partners concerned about liquidity risks in their portfolios. A decade later, however, the industry has come back bigger and bolder and yet also transformed. We’ve identified 10 of the biggest trends that shaped the industry over the past decade.

Overall, U.S. private-equity deal volume slowed somewhat in 2019 as of early December, despite a mounting pile of dry powder available to invest. However, plenty of private-equity firms kept themselves busy with new, and often ambitious, deals. WSJ Pro's Isaac Taylor and Laura Kreutzer highlight five deals that helped shape the deal market in 2019. In compiling the list, they looked not just at the monetary value but also considered the precedent each deal sets for future transactions, a prominent trend associated with it or the buzz surrounding the deal.

Each year, Private Equity Analyst asks professionals across the private-markets industry to reflect on the year that has just ended and share projections for the one that lies ahead. This year’s contributions come from professionals from a range of industries, experiences and geographies: 

• Buyouts

• Venture Capital

• Secondary and Other

• Limited Partners/Placement Agents

Send us your tips, suggestions and feedback. Write to:

Laura Kreutzer, Ted Bunker, Laura Cooper, Chris Cumming, Luis Garcia, William Louch, Chitra Vemuri.

Follow us on Twitter: @LCooperReports, @LHVGarcia, @LauraKreutzer, @william_louch.