Regulatory fragmentation: the overlooked factor shaping private equity fund structures

For private equity managers structuring funds across different jurisdictions, regulatory complexity can influence where those funds are launched and how they are structured.

New research commissioned by Ocorian shows the significance of regulation in these decisions. More than three-quarters (77%) respondents describe regulatory considerations as a significant but manageable factor in determining fund structures, while a further 7% regard them as a primary structuring constraint.
 

Regulatory fragmentation is being underestimated

The effects are visible, with 46% of respondents saying 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.

Fund managers’ decisions to avoid these regions reflect a broader concern around regulatory fragmentation. Nearly half (44%) of respondents believe the market is underestimating the risks it poses, compared to other factors such as operational scale and resilience (38%), investor concentration risk (15%) and liquidity risk (4%).
 

North America viewed as the most complex market

Surprisingly, more than half (56%) of respondents consider North America as having the greatest regulatory complexity for their business. This is compared to 38% for Europe and just 2% considering regulatory complexity to be broadly similar across all regions. 

This finding comes despite the U.S relaxation of its rules covering climate and ESG disclosures. Rebecca Thorpe, Global Head of Regulatory Consulting at Ocorian, says this possibly reflects “the focus of U.S. authorities on transparency and valuations”.
 

Managing complexity across jurisdictions

Regulatory complexity is unlikely to diminish; however, there are practical steps fund managers can take to reduce its impact. A clear understanding of how regulatory requirements differ across jurisdictions, and what these differences mean for fund structures, reporting obligations and governance expectations, is an important starting point.

Operating models also need to be able to adapt as requirements evolve, which for fund managers navigating multiple jurisdictions means having detailed local knowledge and a broader understanding of global regulatory trends. Thorpe adds, “Fund managers increasingly need expert support across different markets and jurisdictions to adapt to different regulatory regimes and practices.”
 

Plan for regulatory complexity early

Fund managers are navigating this complexity alongside many other priorities such as fundraising, deployment, portfolio performance and investor relationships. Regulation should not become a distraction from growth, but the findings suggest it needs to be treated as a strategic consideration rather than a compliance obligation.

Recognising the impact of regulation early, incorporating it into planning and building structures capable of supporting expansion across multiple markets can help managers keep that complexity under control and avoid costly changes later.

The research cited in this article was conducted in May 2026 by independent research company PureProfile on behalf of Ocorian among 300 senior executives at private equity fund managers across the US and Europe, representing total assets under management of $3.511 trillion. This article is for general information only and does not constitute legal, regulatory or investment advice. Any regulatory interpretation should be reviewed against the relevant legal and compliance requirements before publication.