North American fund managers find European regulations overly complex, with many considering them a significant barrier to entry, according to a study by Ocorian, an administration and compliance service provider for funds, corporate, capital markets and private clients.
The study surveyed private equity, private debt, real estate, venture capital and infrastructure fund managers responsible for managing $1.591 trillion in assets across the US and Canada. About 99% of respondents said they find EU regulations more complicated than those in their home countries, with 37% describing them as “extremely complex.”
The research highlighted growing concerns about the future regulatory landscape in Europe. Almost eight in ten (79%) fund managers said they expect European regulations to increase over the next two to three years, with 11% predicting a dramatic rise. Over the next five years, 76% anticipate further regulatory tightening, potentially adding even more layers of complexity to an already difficult market for North American managers.
Despite these challenges, most North American fund managers (99%) believe their organisations are proficient at meeting European regulatory requirements. However, 91% said they think the European market is over-regulated, with 61% of these stating that it is off-putting for both themselves and their investors. A smaller proportion (30%) acknowledged the high level of regulation but clarified that they do not view it as a barrier to entry.
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The introduction of the Digital Operational Resilience Act (Dora) in January 2025 was identified as the top regulatory concern by 60% of respondents. Additional concerns included increasing barriers to entry (41%), the Payment Services Directive (PSD3), new anti-money laundering regulations (31%), and the regime for artificial intelligence (28%). Concerns around ESG regulations, particularly diversity and inclusion and transparency, were also highlighted by 29% and 18% of respondents, respectively.
Ocorian’s study also found a split in how North American managers plan to structure future funds in Europe, with 52% opting for onshore solutions and 48% choosing offshore setups, reflecting the uncertainty and complexity surrounding European regulation.
Thomas Fahl, global head of alternative investment fund manager, at Ocorian, said: “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 at Ocorian company and specialist financial services regulatory consultancy Bovill Newgate, said: “It’s curious that 61% of the 91% who say Europe is over-regulated find it off-putting, yet they’re still investing and see themselves as good at navigating it. Perhaps it influences their choices around distribution – they’re happy to raise capital but find doing more significant activities off-putting.”
He speculated that “for most North American companies, French employment legislation might be more off-putting than financial services rules.”
O’Bree added: “It’s no surprise that 91% felt the European market is over-regulated. I’m more astonished by the 9% who didn’t feel that way. If you asked American and Asian fund managers, they’d likely say the same. More regulation is good for our business, but there is certainly a lot of it.”
