Given uncertainty in policy, particularly around Brexit, how do private equity (PE) firms investing in the UK behave? Analysing their response is vital for understanding the impact on investment per se and designing policy that limits uncertainty. Building on the recent work of Mike Wright and co-authors, we explore the effect of uncertainty measures on UK PE activity and the channels that transmit uncertainty to the PE market. After developing hypotheses that link the ‘PE activity and uncertainty’ relation via a real options, interim risk or moral hazard channel, we employ a novel dataset on PE targets and non-targets over the 2010–2019 period. We find that uncertainty, especially new measures closely aligned to Brexit, have negatively affected PE activity in the UK. Moreover, the transmission of such uncertainty occurs primarily through the real options channel and through greater uncertainty arising from prolonged interim periods of PE deals (i.e. the interim risk channel). Our results imply that the present and ongoing uncertainty in Brexit policy will continue to depress PE activity and by extension, investment and growth in the UK. Policymakers are urged to resolve such uncertainties.

中文翻译：

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成还是不成？模拟英国脱欧不确定性对英国私募股权活动的影响

鉴于政策的不确定性，尤其是在英国退欧前后，在英国投资的私募股权 (PE) 公司的表现如何？分析他们的反应对于了解对投资本身的影响和设计限制不确定性的政策至关重要。基于 Mike Wright 及其合著者最近的工作，我们探讨了不确定性措施对英国 PE 活动的影响以及将不确定性传递给 PE 市场的渠道。在提出通过实物期权、临时风险或道德风险渠道将“PE 活动与不确定性”关系联系起来的假设之后，我们使用了一个关于 2010-2019 年期间 PE 目标和非目标的新数据集。我们发现不确定性，尤其是与英国脱欧密切相关的新措施，对英国的私募股权活动产生了负面影响。而且，这种不确定性的传递主要是通过实物期权渠道和PE交易的长期中期（即中期风险渠道）产生的更大的不确定性。我们的结果表明，英国脱欧政策当前和持续的不确定性将继续抑制私募股权活动，进而抑制英国的投资和增长。敦促政策制定者解决这些不确定性。