Corgentum Consulting, a leading provider of operational due diligence reviews and background investigations, announced the results of a new private equity investor and analyst survey.

The vast majority of investors surveyed (83%) felt that compliance management is one of the most important operational factors when evaluating private equity funds. Similarly, 79% stated that a weak compliance framework would negatively influence their private equity investment decision. However, only 14% of investors felt private equity managers placed more emphasis on regulatory audit preparedness as compared to hedge funds.

86% of those surveyed also felt that continued regulatory uncertainty in Europe presented significant challenges to private equity General Partners doing business in Europe. Specifically, Limited Partners were concerned with issues such as the General Data Protection Regulation (GDPR) enforcement and Theresa May's management of the UK Brexit process would require more compliance resources.

"These findings demonstrate that there is a significant opportunity for private equity General Partners to do a better job of communicating the ways in which they approach compliance management to their investors," said Jason Scharfman, Managing Partner of Corgentum Consulting.

While 84% felt that the growth of Limited Partner Advisory Committees (LPACs) bolstered governance initiatives, 76% stated that managers could improve in this area with a focus on transparency, fees and conflicts. 

68% of investors also felt that private equity managers needed to better focus on the integration of technology and cybersecurity management with the compliance function. 71% of investors also felt that private equity managers should devote more resources to ongoing compliance management and regulatory testing and surveillance.

The survey was conducted as part of the Corgentum webinar series hosted by Jason Scharfman, a leading expert in operational due diligence and compliance for hedge funds and private equity. He is also the author of the newly released Private Equity Compliance: Analyzing Conflicts, Fees, and Risks (Wiley Finance) available on Amazon. The book serves as a compliment to the author's previous book Hedge Fund Compliance: Risks, Regulation, and Management.