Investor scrutiny around fund domicile and structuring decision making is placing a new focus on ‘jurisdiction’, both as a strategic risk and an opportunity, according to new figures.
Published recently as a report by Private Equity Wire, supported by Hawksford, the data highlights that 86% of alternative asset managers have seen an increase in the due diligence undertaken by investors in recent years, when it comes to jurisdictional choice and operational infrastructure, against the backdrop of persistently challenging fundraising conditions.
Reflecting on the findings, Simon Page, Head of Fund Services, Hawksford, commented:
“For LPs, the domicile has become a key risk lens. It determines the strength of oversight, investor protections, reporting expectations and how confidently capital can be deployed, monitored and returned. In today’s environment, LPs are gravitating to jurisdictions with predictable regulation, credible supervision and proportionate anti-money laundering and KYC regimes that reduce execution risk and reputational exposure.”
In particular, the report, entitled ‘Jurisdictional Alpha’, highlights that, while stability is a fundamental criteria for managers, agility is also critical. Key issues of jurisdictional friction and opportunity in the eyes of managers according to the study include:
- Regulatory and approval timelines (57% of respondents)
- Local substance and director requirements (45%)
- KYC/AML and investor onboarding (38%)
- Complexity in legal structuring (31%)
Figure 3. Main friction points when launching in a new jurisdiction
Simon added: “Stability shows up in the day‑to‑day mechanics of running a fund. Jurisdictions with mature regimes and experienced regulators typically deliver more predictable approval timelines, clearer interpretations and fewer last‑minute changes to structuring or substance requirements.
“There’s no doubt, though, that both agility and stability in the regulatory environment are now currency for funds, and routes to alpha generation. Not only for the security which wins LP commitments, but also to minimise the friction and cost pressure which feel particularly acute in the current landscape. With a presence in key fund locations around the world, Hawksford’s global footprint enables us to deliver on-the-ground support to clients from set-up through the entire fund lifecycle.”
Download the report
Download a copy of the full ‘Jurisdictional Alpha’ Rapid Read Report from Private Equity Wire below.
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