By Justin Partington, Global Head of Fund and Asset Managers
Know Your Customer (KYC) has undergone a dramatic shift in private markets. Once seen as a routine administrative requirement, it has now become a complex, high‑stakes process that shapes investor experience, regulatory compliance, and even competitive positioning.
As competition for capital intensifies and investor profiles diversify, fund managers are feeling increasing pressure to deliver onboarding that is not only robust but seamless, clear and relationship‑enhancing – which is why we’re shining the spotlight on KYC challenges and opportunities in our new whitepaper, featuring survey feedback and insights from industry players across the globe.
What is KYC?
Unlike the broader investment process – where limited partners typically scrutinise the manager – with KYC the dynamic reverses. Managers must ask for sensitive information, navigate investor expectations and maintain trust, all while managing growing regulatory scrutiny. This role reversal can be delicate: long, unclear or error‑prone processes risk damaging confidence at precisely the moment relationships are being formed.
Regulatory complexity exacerbates the challenge. KYC expectations vary by jurisdiction, and globalised investor bases create a patchwork of requirements that are difficult to harmonise. Cross‑border structures, multi‑layered vehicles and evolving reporting standards all contribute to a fragmented process that demands time, expertise and significant operational effort.
Meanwhile, the rise of retail capital in private markets is adding further strain. Retail flows often move through multiple intermediaries, making beneficial ownership difficult to trace. These investors also tend to be high‑volume but lower value, increasing the relative cost of compliance and intensifying regulators’ focus on transparency, speed and control.
Although digital solutions such as automated onboarding platforms have the potential to transform the process – making it faster, more consistent and more auditable – many managers still rely on legacy, manual methods. This creates operational bottlenecks, introduces unnecessary risk, and places pressure on investor relationships. Importantly, these pain points are no longer confined to the largest managers: mid‑cap and smaller firms are increasingly aware of the reputational and commercial risks associated with outdated approaches.
Our new KYC survey report explores how fund managers across the industry are navigating these pressures. Drawing on insights from more than 50 participants with a combined AUM of £967 billion, it highlights today’s most common KYC frustrations, where inefficiencies are most acute, and how managers want the process to evolve. The findings point towards a clear industry momentum: a desire for smoother, smarter, digitally enabled onboarding that strengthens trust instead of testing it. Click below to read and download the whitepaper:
We’d like to thank the numerous fund managers, advisors, IQ-EQ colleagues and other members of our global network, who shared their KYC hopes (and frustrations) and took the time to participate in our online survey. We’d also like to thank Wagtails Private Markets for its support in the production of this whitepaper, which we hope can point the way forwards to a smoother KYC process for all involved, GPs and LPs alike.
Discover IQ-EQ’s KYC services
Streamlining KYC and AML compliance for asset managers
At IQ-EQ, our expert teams – supported by our proprietary regulatory compliance tech, MaxComply™ – offer tailored KYC and AML solutions with managed services to streamline investor onboarding, manage risks and enhance investor experience.
MaxComply combines Agentic AI and GenAI to deliver an always‑on, adaptive compliance engine that automates follow‑up tasks, ongoing monitoring and exception escalation, while also enabling intelligent document extraction, structured data processing and AI‑driven reporting to reduce manual work and improve accuracy. This unique software-as-a-service (SaaS) platform is supported by a fully centralised data environment that unifies onboarding and compliance records and provides managers with GP‑level drill‑through reporting for deeper portfolio analysis.
Beyond MaxComply, our AML/KYC services are designed to support you across every stage of your fund’s lifecycle, enhancing operational efficiency, reducing regulatory friction and strengthening investor confidence. With expert people, proven processes and the power of MaxComply, we deliver seamless, compliant and consistent execution.
Click here to find out more and contact our team today.
