Raising European capital: understanding the market to access the opportunities

U.S. managers who have built their entire investor base in North America are finding fewer checks, longer timelines, and more competition for every allocation. Mid-market fundraising fell more than 40% last year, according to PitchBook, while VC fundraising dropped 35%¹. For firms that have relied solely on domestic capital, the pressure to diversify their LP base is no longer theoretical.

The good news is that there is a deep, growing, and actively interested pool of capital on the other side of the Atlantic. The number of European family offices, for example, is expected to grow by almost a third to 2,650 by 2030, according to Magistral Consulting² – meaning more investors with meaningful assets seeking deployment. But managers raising in Europe for the first time will also face their fair share of challenges. The opportunity can feel overwhelming, and without the right preparation, it often is.
 

Why Europe, why now?

Almost half of European institutional investors surveyed this year by Aviva Investors intend to increase their allocations to private markets, with three-quarters citing diversification as the primary driver³. These LPs are not waiting. They are actively looking for the kind of high-growth opportunities that U.S. mid-market PE and VC can offer. And the U.S. market is giving these investors a strong reason to look. Mid-market deployment grew 8.5% to $411 billion in 2025, while exits increased in the double digits to over $140 billion, according to PitchBook⁴. In venture capital, AI drove America’s start-up funding to a record $270 billion in Q1 2026, with all but $3 billion deployed in the U.S., according to KPMG⁵. Potential mega-IPOs of OpenAI and Anthropic could deliver equally mega liquidity events.

Geopolitical uncertainty elsewhere is sharpening European appetite further. Recent events in the Middle East have introduced new considerations for investors in the region. Meanwhile, fundraising across Asia remains intensely competitive, while in some instances, investors have also been disproportionately affected by the reliance on Gulf oil and gas. Europe, by contrast, offers well-established institutional infrastructure and a sophisticated LP base with a growing appetite specifically for U.S. private markets.
 

The complexity problem

European investors want more private assets, and the U.S. can provide them with the opportunities and liquidity they need. However, for U.S. GPs, Europe can appear fragmented and challenging. Thirty jurisdictions, often with differing regulatory expectations, reporting standards, and investor preferences, create a complex landscape that can be overwhelming.

Regulations, such as the Alternative Investment Fund Managers Directive (AIFMD), present particular complexity and burdens. The Sustainable Finance Disclosure Regulation – currently going through the process of review and overhaul – adds ESG reporting responsibilities even for firms without any European company exposure, and European LPs have their own expectations regarding disclosures, as well as restrictions that may prevent some from investing in offshore funds.

Large U.S. private markets managers have built capabilities to meet many of these challenges. Yet, mid-market firms and VCs also have options when seeking to raise capital in Europe. A clear strategy to target LPs is essential to success.
 

The routes to European LPs

There are three main routes to accessing European LPs: Reverse Solicitation, National Private Placement Regimes, and the AIFMD (or EuVECA – for VC funds) Passport. Each has its benefits as well as its drawbacks.

• Reverse Solicitation – Following the tightening (pre-)marketing rules, GPs must be able to show they received a completely unsolicited approach from an LP, placing a high barrier on this route.

• National Private Placement Regimes – Managers can maintain their non-European fund structures and domiciles but need a country-by-country approach to fundraising. Private placement is not available in France, Italy, or Spain, while other countries present challenges. That said, certain jurisdictions, such as the Nordics and Benelux, have lighter-touch regimes that enable NPPR as a viable strategy for a very targeted marketing effort.

• AIFMD Passport – The Alternative Investment Fund Managers Directive provides a comprehensive framework for marketing and distributing funds across 30 EU and EEA states (including Iceland, Liechtenstein, and Norway), while specific rules apply to the UK and Switzerland. It requires firms to establish European-domiciled AIFs managed by local AIFMs. While large GPs with existing European presence may opt to build their own AIFM platform, a faster and potentially more cost-effective approach is usually to outsource AIFMD regulatory compliance and oversight to a third-party AIFM with established infrastructure – such as Ocorian.
   

Finding the right partner

For first-time European expansion in particular, the difference between a smooth raise and a painful one can often come down to operational support. The right partner brings on-the-ground experience across administration, compliance, structuring, and investor servicing. Critically, they bring it as a coordinated capability rather than a collection of disconnected services.

Managers should look for partners with a genuine European footprint who have guided firms through this process many times before, and who can manage the complexity across jurisdictions so the GP can focus on what they do best: telling their investment story. Ocorian has the infrastructure, people and experience across Europe, the U.S. and offshore jurisdictions to guide mid-market GPs and VCs through the complexity and toward the opportunity.

There is a large, growing and actively interested pool of European investors with an appetite for private markets, particularly the sizable and relatively liquid opportunities of U.S. mid-market private equity and VC. The European continent can present a realistic and accessible opportunity for GPs to raise capital, but only for those who arrive with the right structure, the right support, and a clear strategy for navigating the complexity.

¹ https://pitchbook.com/news/reports/2025-annual-us-pe-middle-market-report

² https://magistralconsulting.com/family-office-investment-in-private-equity-and-emerging-markets/#:~:text=Family%20Office%20Wealth:%20Projected%20to,%2C%20marking%20a%20189%25%20increase.&text=The%20landscape%20is%20changing%20because,ever%20more%20sophisticated%20family%20offices

³ https://www.avivainvestors.com/en-gb/capabilities/private-markets/private-markets-study-2026/

⁴ https://pitchbook.com/news/reports/2025-annual-us-pe-middle-market-report

⁵ https://kpmg.com/xx/en/media/press-releases/2026/04/global-vc-investment-surges-to-record-330-9-billion-dollar-in-q1-26.html#:~:text=VC%20investment%20in%20Americas%20dominated,after%20segment%2C%20driving%20valuations%20higher