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Alternative fund managers expect increased fines for regulatory breaches, survey reveals
Invest
Alternative fund managers expect increased fines for regulatory breaches, survey reveals
A new study by Ocorian, a market leader in regulation and compliance services, has revealed that alternative fund managers anticipate a rise in fines for breaking regulations in their sectors. The international survey, conducted among fund managers at private equity, venture capital, and real estate firms, found that 79% expect the number and overall value of fines issued in their sectors to increase, with 18% expecting a dramatic rise. Additionally, 86% of respondents said their organisations are preparing or budgeting for a potential increase in fines they could face.
Alternative fund managers expect increased fines for regulatory breaches, survey reveals
A new study by Ocorian, a market leader in regulation and compliance services, has revealed that alternative fund managers anticipate a rise in fines for breaking regulations in their sectors. The international survey, conducted among fund managers at private equity, venture capital, and real estate firms, found that 79% expect the number and overall value of fines issued in their sectors to increase, with 18% expecting a dramatic rise. Additionally, 86% of respondents said their organisations are preparing or budgeting for a potential increase in fines they could face.
The research also highlighted that 79% of those interviewed believe their market is over-regulated, and 85% believe the level of regulation will increase over the next five years. When it comes to adhering to regulations in different jurisdictions, only 29% of those surveyed say it is not an issue, while 30% find it very difficult, and 37% say it is quite difficult. Moreover, 59% believe their organisation will find it more difficult to adhere to regulations over the next five years, with just 27% believing it will become easier.
Aron Brown, Head of Regulatory & Compliance at Ocorian, commented, "It's surprising to see that 54% of the firms surveyed believe their organisations are too focused on compliance and regulation and not on commercial aspirations. Whereas what we've seen with our clients is if you get it right in the first place you become more efficient and are more attractive to investors."
The research also identified actions alternative fund managers have taken due to regulatory difficulties. Over the past five years, 65% of those surveyed said their organisations had invested in new technology to help with compliance, 55% had decided against making a major acquisition or investment because of regulatory concerns, and 53% had closed a division or part of their business due to regulatory concerns.
The study also found that 87% of the professionals interviewed expect their organisations to increase budgets for regulation and compliance over the next five years, highlighting the growing importance of these issues in the alternative fund management sector.

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