--- title: How to Prepare for Regulated Investors in Latin America Before Fundraising Starts description: Prepare effectively for fundraising from regulated investors in Latin America by understanding their unique requirements and ensuring compliance with investment regulations. image: https://www.cardonalconsulting.com/hubfs/Banner%20How%20to%20Prepare%20for%20Regulated%20Investors.png --- [Skip to content](https://www.cardonalconsulting.com/publication/how-to-prepare-for-regulated-investors-in-latin-america-before-fundraising-starts#main-content) [![cardonal-logo-horizontal-stalactite](https://www.cardonalconsulting.com/hubfs/Brand/cardonal-logo-horizontal-stalactite.svg)](https://www.cardonalconsulting.com/en/home?hsLang=en) - [Home](https://www.cardonalconsulting.com/en/home?hsLang=en) - [Practice Areas](https://www.cardonalconsulting.com/en/practice-areas?hsLang=en) - [Fund Investment Advisory](https://www.cardonalconsulting.com/en/fund-investment-advisory?hsLang=en) - [Side Letter Negotiation](https://www.cardonalconsulting.com/en/side-letter-negotiation?hsLang=en) - [Regulatory & Compliance](https://www.cardonalconsulting.com/en/regulatory-compliance?hsLang=en) - [Tax Advisory](https://www.cardonalconsulting.com/en/tax-advisory?hsLang=en) - [Fund & Vehicle Structuring](https://www.cardonalconsulting.com/en/fund-vehicle-structuring?hsLang=en) - [Subscription & Onboarding](https://www.cardonalconsulting.com/en/subscription-onboarding?hsLang=en) - [Team](https://www.cardonalconsulting.com/en/team?hsLang=en) - [Publications](https://www.cardonalconsulting.com/publication/?hsLang=en) - [Get in Touch](https://www.cardonalconsulting.com/en/contact-us?hsLang=en) - [EN](https://www.cardonalconsulting.com/publication/how-to-prepare-for-regulated-investors-in-latin-america-before-fundraising-starts) / [ES](https://www.cardonalconsulting.com/es-cl/publicaciones/cómo-prepararse-para-los-inversionistas-regulados-de-latinoamérica-antes-de-iniciar-el-levantamiento-de-capital) Open menu [![cardonal-logo-horizontal-stalactite](https://www.cardonalconsulting.com/hubfs/Brand/cardonal-logo-horizontal-stalactite.svg)](https://www.cardonalconsulting.com/en/home?hsLang=en) Close menu [Home](https://www.cardonalconsulting.com/en/home?hsLang=en) Practice Areas [Fund Investment Advisory](https://www.cardonalconsulting.com/en/fund-investment-advisory?hsLang=en) [Side Letter Negotiation](https://www.cardonalconsulting.com/en/side-letter-negotiation?hsLang=en) [Regulatory & Compliance](https://www.cardonalconsulting.com/en/regulatory-compliance?hsLang=en) [Tax Advisory](https://www.cardonalconsulting.com/en/tax-advisory?hsLang=en) [Fund & Vehicle Structuring](https://www.cardonalconsulting.com/en/fund-vehicle-structuring?hsLang=en) [Subscription & Onboarding](https://www.cardonalconsulting.com/en/subscription-onboarding?hsLang=en) [Team](https://www.cardonalconsulting.com/en/team?hsLang=en) [Publications](https://www.cardonalconsulting.com/publication/?hsLang=en) [Get in Touch](https://www.cardonalconsulting.com/en/contact-us?hsLang=en) [EN](https://www.cardonalconsulting.com/publication/how-to-prepare-for-regulated-investors-in-latin-america-before-fundraising-starts) / [ES](https://www.cardonalconsulting.com/es-cl/publicaciones/cómo-prepararse-para-los-inversionistas-regulados-de-latinoamérica-antes-de-iniciar-el-levantamiento-de-capital) Investors EN / ES # How to Prepare for Regulated Investors in Latin America Before Fundraising Starts ![How to Prepare for Regulated Investors](https://www.cardonalconsulting.com/hubfs/How%20to%20Prepare%20for%20Regulated%20Investors.png) ### How to Prepare for Regulated Investors in Latin America Before Fundraising Starts There is a material difference between preparing to raise capital from Latin American family offices and preparing to raise capital from regulated institutional investors — AFPs, insurance companies, pension funds, and other vehicles with investment mandates defined by regulation. It is not just a difference of scale or sophistication. It is a difference of architecture: regulated investors cannot adapt their processes to the GP's preferred pace or format. The GP must adapt to the LP's framework. And that framework has rules that are not negotiated. ## Who are the relevant regulated institutional investors in LatAm → Chilean AFPs: 7 administrators under CMF supervision, with alternative asset investment limits that have expanded gradually (up to 20% by 2027 per the Central Bank's 2024 resolution). → Life insurance companies in Chile, Colombia, and Mexico: long-term investors with asset-liability matching requirements that condition their investments in illiquid funds. → Unemployment funds in Chile (AFC): active participants in alternative assets following recent regulatory changes. → Colombian AFPs, Peruvian AFPs, Mexican Afores: similar universe with distinct local dynamics in each country. ## 5 points to verify before approaching a regulated Latin American LP 1\. Fund structure compatible with LP investment limits. The GP must verify whether the fund structure is compatible with the investment limits applicable to the target LP. A Chilean AFP cannot invest in any structure — there are restrictions on domiciles, vehicle types, and leverage mechanisms that apply by default. 2\. Track record documentation in verifiable format. Regulated investors do not accept track records presented in marketing formats. They require verifiable, preferably audited information with explicit calculation methodology consistent with standards like GIPS. 3\. Fee structure compatible with regulatory caps. Chilean Law 21,735 introduces fee caps on alternative asset structures for pension funds. A GP who has not reviewed whether their structure is compatible may need to renegotiate terms at the worst possible moment — when the LP is already committed in principle. [Working through this right now? Talk to Cardonal before it costs you months](https://www.cardonalconsulting.com/en/contact-us?hsLang=en) 4\. Post-investment reporting capacity in the required format. The regulated LP needs the ability to report their position to their regulator periodically. If the GP cannot provide the information in the required format and frequency, the LP cannot formalize the commitment — regardless of how much they want to. 5\. KYC/AML onboarding process compatible with institutional timelines. Onboarding a regulated institutional LP is more complex and slower than onboarding a family office. Starting this process in parallel with document negotiation — rather than after — can compress the closing significantly.  ## Preparation matters more than enthusiasm A GP who arrives at a conversation with a regulated institutional LP without having verified these five points is not in a position to advance efficiently — even if the conversation itself goes well. Pre-fundraising preparation is not a cost — it is the difference between a 4-month process and a 12-month one. In this article ## What Cardonal does in this context We work with managers in the pre-fundraising preparation stage: reviewing the fund structure from the perspective of the regulatory requirements of target LPs in LatAm, identifying incompatibilities before they appear in the process, and providing support during negotiations with regulated institutional investors. Get Cardonal's 5-Point Regulatory Readiness Check We'll review your fund structure against Chilean AFP, Colombian AFP, and Mexican Afore requirements in a 30-minute call. No commitment. 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