Ocorian study reveals significance of regulation in determining fund structures in private equity

But surprisingly more than half (55%) believe North America currently poses the greatest regulatory complexity for their business despite recent changes. That compares with 38% who say Europe is more challenging. Just 2% say complexity is broadly similar across all regions.

Nearly half (46%) say they have avoided or found it challenging to structure funds due to regulatory complexity in Europe excluding the UK, while 55% have avoided Latin America and 18% have avoided the UK itself.

Rebecca Thorpe, Global Head of Regulatory Consulting at Ocorian, said: “Regulation plays a significant role in fund structuring and there is genuine concern about the risks of regulatory fragmentation being underestimated across the global market.

“Regulation to some extent influences where private equity fund managers launch funds, and there is evidence that firms are avoiding certain regions or finding it hard to structure funds in those regions. That makes it surprising that North America is seen as more complex for regulation than other regions despite recent changes, possibly reflecting the focus by U.S. authorities on transparency and valuations.

“Fund managers increasingly need expert support across different markets and jurisdictions to adapt to different regulatory regimes and practices.”