“We created a Luxembourg sleeve in our fund structure, but then faced operational hurdles.”

Last month, I spoke with the COO of a mid-market private equity Dirm ($10B AUM) that had been struggling to raise capital in the U.S.

Their pivot? Tap into European capital. They added a Lux sleeve to an existing fund structure, only to hit unexpected operational roadblocks.

What went wrong?

They underestimated the infrastructure needed to support global expansion, including:

Regulatory & Governance Structures

• Navigating AIFMD (Alternative Investment Fund Managers Directive)
• Understanding local marketing permissions and distribution rules
• Establishing appropriate oversight mechanisms

Operational Readiness

• Setting up robust reporting protocols and processes
• Selecting and managing local fund administrators and depositories

Cross-Functional Coordination

• Assigning a “quarterback” to own the roadmap
• Ensuring consistent communication across internal teams, vendors, and regulators

These are common pain points for U.S. managers going global. Too often, global expansion is treated like a copy-paste of the U.S. model. However, global markets require a different playbook, one that reDlects local product structures, regulatory frameworks, and cultural norms.

Global expansion is a smart next step for many Dirms. With a strategic roadmap, it indeed becomes a powerful opportunity for growth.

In this series, we’ll explore where Dirms get stuck and what it takes to go global without spinning your wheels.

Next Post Preview: What U.S. fund managers often overlook when expanding to Europe and how to course correct.