Fund-raising abroad: Trends and challenges

Alternative asset managers are becoming increasingly important players in the global financial services industry. Their rise in prominence has led to greater global scrutiny of the alternative asset management industry and a concerted push by securities regulators to raise the standards that asset managers are held to. This push has been so successful that alternative asset management – traditionally an industry with minimal regulatory oversight – is now one of the most regulated industries in the world.

These developments have considerably changed the regulatory environment for Indian general partners (GPs) who are looking to market their India-focused funds to global investors. The defining feature of this new environment is the differing nature of global regulation, with some jurisdictions targeting the manager, some targeting the fund, and others targeting both the fund and the manager.

From a fund-raising perspective, the most important jurisdiction for an Indian GP remains the US, with newer classes of investors such as endowments and pension funds joining the traditional investor bases such as high net worth individuals and India-focused funds. The defining characteristic of US regulation of alternative investments is its focus on the investment manager.

Vivek Mimani is a senior associate and Rohit Jayaraman is an associate at Khaitan & Co. Views are personal.