Ocorian and Newgate Compliance: Alternative fund managers lose mandates due to compliance issues

Ocorian and Newgate Compliance: Alternative fund managers lose mandates due to compliance issues

April 9, 2024

Alternative Investing Rules and Legislation
Wet regelgeving (06) rechtspraak

New research from Ocorian and Newgate Compliance, market leaders in regulation and compliance services for funds, corporates, capital markets and private clients shows alternative fund managers are losing investment mandates or clients because of compliance issues.

It also reveals there has been an increased level of internal conflict between the fund management team and compliance and risk team during the last two years which shows no sign of slowing – instead it’s only expected to rise over the next three years.

The international study with senior leaders and senior compliance and risk executives at alternative fund manager firms which collectively manage around US$132.25 billion AUM, found 81% think issues with their organisation’s compliance has resulted in losing investment mandates or clients over the past three years.

There are signs the trend is getting worse. All senior executives surveyed worry that as fund managers are becoming increasingly subject to global compliance regulations, this will increase the risk of their organisation failing in their compliance tasks. Of these, 70% are very concerned about this.

These failings are highly likely to translate into compliance breaches. Of those surveyed, more than nine in ten (92%) expect the level of compliance breaches and risk profile of their organisation to increase over the next 24 months with 24% predicting a dramatic increase.

Ocorian’s survey reveals another concerning factor that 90% of alternative fund managers report that there has been an increase in the level of conflict between the fund management team and the compliance and risk team over the last two years – and this is only set to increase. More than nine in ten (92%) expect this level of conflict to increase further still over the next three years.

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