New research from Ocorian, a global leader in fund administration, capital markets, corporate and fiduciary services shows that nearly all North American fund managers currently find EU regulations complex and predict they will only find it harder to navigate over the next two years – with many saying its over-regulated to the point of being off-putting Ocorian’s study with private equity, private debt, real estate, venture capital and infrastructure fund management executives in the US and Canada responsible for $1.591 trillion assets under management found almost all (99%) view the current EU regulations as complex in comparison to their home jurisdictions. Over a third (37%) of these say they are extremely complex. 

Almost eight in ten (79%) North American fund managers questioned expect the European regulatory landscape to evolve over the next two to three years, with more than one in ten (11%) expecting a dramatic increase. Just one in five (19%) believe it will stay the same. More than three out of four (76%) expect the overall level of regulation in the European fund management sector to increase over the next five years, with one in ten (10%) of these predicting a significant increase. Around a quarter (23%) think it will stay the same.

While almost all (99%) of the North American fund managers surveyed feel that their organisation is ‘good’ or ‘excellent’ at meeting its regulatory requirements for Europe, nine in ten (91%) say that they and their investors think the European market is already over-regulated. Of these, the majority (61%) say that the level of regulation is so high that it’s off-putting, both for themselves and for their investors, with the remainder (30%) agreeing there is too much regulation but it’s not causing a barrier for entry. Just 4% say it’s not over-regulated and 5% don’t know.

Ocorian’s North American study reveals that the future looks more complicated. Over two thirds (69%) of those surveyed agree that it will become much harder for North American fund managers to navigate European regulatory complexities over the next two years, and almost one in ten (9%) of these strongly agree with this. A further 14% slightly disagree and 15% strongly disagree, and don’t believe this will become much harder over the next two years. 

When asked for their top three concerns when it comes to European regulation, the introduction of DORA (Digital Operational Resiliency Act on Jan 17th 2025) came out as the top and was selected by 60% of respondents. This was followed by increasing barriers to entry (41%) and PSD3 (Payment Service Directive). Other European regulation concerns were around new anti-money laundering regulations (31%) and a regime for artificial intelligence (28%). Concerns around ESG regulations were also high, with 29% citing concerns around diversity and inclusion regulations and 18% citing concerns about transparency.

Ocorian’s study shows that these concerns about regulation are leading to a split response in whether North American fund managers choose onshore or offshore when setting up new funds in Europe. Just over half (52%) of those surveyed said they’d choose onshore when setting up a fund in Europe, compared to just under half (48%) who would choose offshore. 

Thomas Fahl, Global Head of AIFM at Ocorian, said: “Alternative fund managers in North America are generally very positive about raising capital in Europe and are keen to capitalise on the ability to open up new investment opportunities. However, our new research reveals that many are concerned about what they see as complex levels of regulations in Europe – both in EU regulations as a whole as well as navigating the legal and regulatory nuances between European countries. We feel it would be a shame that some managers are put off by the whole idea that they don’t even talk to us about the solutions we can provide and the opportunities in the market. 

“We’d strongly encourage that conversation as even though regulation can be complex, with the right skill, expertise and support, fund managers can reap the benefits of Europe without falling foul of any legal or regulatory requirements.”

Ed O’Bree, Partner, Bovill Newgate, said: “It’s curious that 61% of the 91% who say it’s already over-regulated find this off-putting when they are still investing and see themselves as good at this. 

Perhaps it plays into their choices around methods of distribution – they’re happy to raise capital but doing anything more significant is off-putting. I’d speculate that for most North American companies French employment legislation is potentially even more off-putting – perhaps they’re thinking of this as much as the financial services rules.

“It’s of absolutely no surprise that 91% felt that the European market is over regulated, in fact I’d say that I’m astonished at the 9% who didn’t feel that and I would wager that if you were to ask American and Asian fund managers, they would say the same. More regulation is clearly good for our business, we won’t complain, but there is a lot of it.”

About Ocorian Fund Services

Ocorian’s fund services team delivers operational excellence across fund administration, AIFM, depositary and accounting services to the world’s largest financial institutions along with dynamic start-up fund managers and boutique houses. It’s team of over 300 funds specialists work across all major asset classes of alternative investment funds such as private equity, real estate, infrastructure, debt and venture capital, whilst its specialist Islamic Finance team is a leading provider of Sharia-compliant investment structures.

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Please note that this release is intended to provide a very general overview of the matters to which it relates and is provided for your convenience. It is not intended as legal or investment advice and should not be relied on as such.

*Ocorian commissioned independent research company PureProfile to conduct research with 100 senior executives at alternative fund managers focusing on private equity, private debt, real estate, venture capital and infrastructure in the US and Canada collectively responsible for $1.591 trillion assets under management during April 2024