The compliance function, once a backend necessity, is now a strategic enabler for organizations. At Pure Search, we are seeing this transformation firsthand in how firms are hiring, structuring teams, and investing in subject matter expertise.
Below we explore what is happening in the market now, how these dynamics are reshaping the talent landscape within private funds and insights into the evolving skills in demand in this new era for compliance.
The private markets continue to grow in scale and influence, supporting over 20 million jobs in the U.S. and 2.2 million in the UK alone. However, with this growth comes heightened visibility – and with visibility, increased regulatory and investor scrutiny. This pressure is forcing private funds to evolve rapidly, rethinking their operational models and placing compliance at the heart of strategic decision-making. Key factors include:
Fundraising headwinds: liquidity constraints have extended fundraising timelines. To adapt, fund managers are targeting ultra-high-net-worth individuals and offering more flexible investment structures.
Renewed momentum in secondaries: the secondaries market has regained traction in 2025. For many managers, it’s becoming a vital tool to unlock liquidity, rebalance portfolios, and create optionality in an otherwise cautious fundraising environment.
Continued growth in private credit: direct lending and asset-backed strategies continue to fuel the expansion of private credit. In a higher-rate, bank-constrained environment, managers are capitalizing on demand for bespoke financing solutions and positioning private credit as a core pillar of portfolio construction.
Artificial intelligence: from diligence to portfolio management, AI is quietly but powerfully reshaping operational and compliance workflows across private funds.
The regulatory picture remains fluid, particularly following the 2024 U.S. elections. Although the SEC’s Private Fund Adviser Rules encountered legal setbacks – most notably being vacated by the Fifth Circuit Court – the underlying objectives of these reforms continue to shape industry standards. The push for greater transparency, enhanced investor protections, and more consistent disclosure practices has not lost momentum. In fact, despite the pause in formal rulemaking, the SEC has intensified its enforcement efforts, focusing on areas such as fee structures, marketing practices, and conflicts of interest.
Enforcement mindset shift: as highlighted in Commissioner Atkins’ May 2025 SEC speaker remarks, the enforcement tone is shifting toward post-facto accountability. This period may become a reference point for future scrutiny where decisions made today could be judged years down the line.
Internal tension in a ‘deregulatory’ environment: while some business leaders are eager to loosen the reins amid perceived deregulation, experienced General Counsels, Chief Compliance Officers and Regulatory Heads are taking a more cautious approach. They know regulatory cycles are cyclical; what’s relaxed under one administration could be tightened under the next. Many are emphasizing long-term frameworks over short-term gains.
Expanding retail access will demand stronger governance: in his May 2025 SEC speaker remarks, Chair Paul Atkins signaled the Commission’s intent to revisit long-standing restrictions on retail investor access to private funds via closed-end vehicles. While the move is framed as an expanding opportunity, it comes with a clear regulatory expectation: firms will need robust frameworks to manage conflicts of interest, illiquidity, and fee disclosures. If realized, this shift could increase compliance complexity and elevate the importance of governance functions across private capital.
Wait-and-see uncertainty: despite regulatory shifts, firms are grappling with ambiguity. With some rules stalled or scaled back, there’s no definitive playbook, forcing compliance teams to prepare for multiple possible futures.
As regulatory expectations rise and private markets become more complex, firms are rethinking their approach to talent. Compliance is no longer viewed as a support function but as a strategic pillar – one that requires specialized knowledge and commercial acumen. The generalist compliance officer is no longer the industry standard. Today’s firms, particularly those managing multiple asset classes or operating cross-border are seeking compliance leaders with deep technical expertise and a commercial mindset. It is essential to not only interpret evolving regulations but also align compliance frameworks with business objectives, manage risk proactively, and communicate effectively with both regulators and investors.
We are seeing three compliance evolution phases in most private funds:
(1) Essential compliance: typically led by a GC, COO or external consultant. At this stage, firms start hiring their first Head of Compliance/Compliance Officer to establish policies, manage filings, and instill a compliance culture.
(2) Developing compliance: as complexity grows, a CCO joins the executive committee, and firms invest in compliance tech, conduct training, and implement risk-based monitoring frameworks.
(3) Enhanced compliance: compliance becomes a competitive advantage. SME leadership is introduced, spanning anti-money laundering (AML), financial crime, sanctions, and data governance. Advanced analytics and RegTech enable predictive monitoring, and the CCO becomes a key strategic voice.
The trend in hiring is shifting from size-of-firm matching to experience relevance. Candidates who’ve built compliance programs from scratch are in high demand, even over those from large, process-driven institutions. The most sought-after candidates blend deep regulatory knowledge with strong stakeholder management and business fluency.
In response to shifting regulatory demands and increasingly complex investment strategies, private funds are re-evaluating how compliance is structured within their organizations. As hiring strategies evolve to prioritize deep expertise and agility, so must the operating models that support these professionals. Firms are adopting hybrid frameworks, drawing from three dominant models:
Business-aligned: teams organized around asset classes (e.g. Private Credit CCO, Real Estate Compliance Lead).
Function-aligned: divisions based on function (Regulatory Compliance, AML, Investment Compliance).
Geography-aligned: compliance leads for each major jurisdiction (e.g. US, EMEA, APAC), especially important for firms managing diverse LP bases and subject to cross-border rules.
Legacy systems, budget constraints, and leadership buy-in will influence the optimal structure. But regardless of model, agility and cross-border coordination are key.
As we look ahead to 2025 and beyond, compliance is set to play an even more central role in shaping the future of private funds. No longer confined to regulatory interpretation, the function is becoming a strategic lever across multiple areas –
Strategic compliance leaders are evolving into architects of future-ready organizations. Their value lies in having the ability to anticipate the rules, not just interpret them. The next generation of CCOs will be defined not by how they react but how far ahead they can see.
Pure Search is privileged to partner with private funds globally to build future-proof compliance teams that are technically strong, commercially minded, and culturally aligned.
If your compliance function is evolving – or needs to – we can guide you through the next phase. To start a conversation about how your hiring strategy can be supported, reach out to me directly at kimberlychua@puresearch.com.
