North American VC and private equity still concerned about regulation
Regulation of valuation processes is seen as the biggest issue
Around 78% believe regulatory risks of operating in some jurisdictions will rise in the next two years
Venture capital and mid-market private equity firms are increasingly concerned about regulatory issues with particular worries about their impact on investment, new research* for Ocorian, a leading U.S. and global asset service provider, shows, despite the apparent pivot away from regulation by enforcement by U.S. regulators.
Around 83% predict the level of regulation in their markets will increase over the next two years with no one questioned expecting regulation to ease, the study with senior U.S. and Canadian executives at mid-market private equity and venture capital firms responsible for $335.25 billion assets under management found.
Nearly nine out of 10 (88%) expect regulatory scrutiny of valuation processes to increase over the next two years and 16% say auditors are already applying more scrutiny and pushback on fund valuations. A further 55% say auditors are asking slightly more questions.
Concerns about regulation is making firms more cautious about investments, the research by Ocorian, which provides fund solutions in the US and globally, shows. Around 80% say they believe VC and private equity companies are becoming more cautious due to compliance and regulatory concerns.
That is feeding through to demands on the time of senior executives. More than four out of five (85%) questioned say they expect senior executives to spend more time dealing with regulatory and compliance issues over the next two years.
It is having an impact on VC and private equity firms’ ability to pursue investment opportunities or even operate in some jurisdictions with 78% saying they expect regulatory risks that could limit investments or geographical expansion to rise over the next two years.
Nearly half (49%) say regulatory issues have meant they have avoided or found it challenging to structure operations in the Middle East and Hong Kong while 44% say the same about the European Union excluding the UK.
However, only one in six (16%) say regulatory complexity is the primary deciding factor when setting up a fund or investment structure although a further 74% say it is one of several important considerations.
Howard Nurtman, Managing Director – Regulatory & Compliance Services, at Ocorian, said: “Regulators are zeroing in on valuations, disclosures, and governance, and firms that treat compliance as a tick-box exercise will be left exposed. At Ocorian, we acknowledge that neglect of a compliance program can prevent talented fund managers from fulfilling their potential and achieving their AUM and growth targets. On the matter of valuations, we have seen many SEC examiners focus on valuation methods, policies and processes. Firms should look for an independent risk-based process that provides an arms-length valuation that will stand up to scrutiny from examiner. Many firms are looking at all options available including the use of outside independent valuation firms. At Ocorian, we help clients navigate this process with confidence and deliberation, ensuring compliance becomes a facilitator of growth rather than a brake on it.”
“Private equity and venture capital firms expect regulatory and compliance concerns to increase and anticipate senior executives spending more time addressing compliance issues," he continues.
“While it’s true that firms are under pressure, the prevailing message from U.S. regulators has been a pivot away from regulation by enforcement, with efforts to raise registration thresholds and shift focus to risk-based supervision.
“What’s absolutely clear is that scrutiny of valuations is intensifying. Firms considering the cost of compliance around valuations, evidencing how they’re valuing their portfolio companies is becoming much more complicated. Firms are having to document and justify their processes with far greater rigor. It’s about demonstrating robust governance, they will have to be completely buttoned up. And that’s where we come in. Ocorian helps clients build compliance frameworks that are proactive, auditable, and ready for scrutiny across jurisdictions.”
Ocorian provides regulatory and compliance support, fund administration and valuation services to private equity, venture capital, and institutional investors globally. Our on-the-ground U.S. and cross-border experts help firms stay ahead of evolving regulatory expectations, giving clients the confidence to operate, structure, and scale wherever opportunities arise.
* In May 2025 Ocorian commissioned independent research company PureProfile to interview 100 senior venture capital and mid-market private equity professionals in the US and Canada working for firms with $335.25 billion assets under management.
About Ocorian
Ocorian is a global leader in fund services, corporate and trust services, capital markets, and regulatory and compliance support.
Unlocking new value for its clients across jurisdictions and service lines is Ocorian’s priority; it manages over 17,000 structures on behalf of 8,000+ clients, including financial institutions, large-scale international organisations, and high-net-worth individuals.
Ocorian provides fully compliant, tailored solutions that are individual to clients’ needs, no matter where in the world they hold financial interests, or however they are structured.
The group offers a full suite of corporate, fund and private client services across a network of offices spanning all the world’s financial hubs. Locations include Bermuda, BVI, Cayman, Denmark, Finland, Germany, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Luxembourg, Mauritius, Netherlands, Norway, Singapore, Sweden, UAE, the UK, and the US.
To find out more about Ocorian and its services, including regulatory information, visit www.ocorian.com