The article applies alliance theory from international relations to explain why investment screening regimes inevitably expand in scope and membership, and what this means for family office cross-border portfolio management.

The following guest article, from Paul Hayman (more on the author below the article), examines how investment screening regimes are following predictable escalation patterns that family offices can anticipate using international relations theory. The editors are pleased to share this content; the usual editorial disclaimers apply to guest articles. To comment and respond, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Family offices managing cross-border portfolios face a strategically important question: will investment screening regimes continue to tighten, or are we approaching a regulatory plateau?

International relations theory suggests a directional answer. Restriction coalitions, once formed, tend to expand through recurring coordination patterns. The underlying logic – alliance coordination costs, credibility signalling, and domestic political audience costs – creates a structural bias towards further tightening over time.

For family offices, this is not about predicting any single regulatory decision. It is about recognising a trajectory already in motion and positioning portfolios ahead of it.

The alliance logic behind regulatory tightening

Alliance theory, particularly Glenn Snyder’s work on – The Security Dilemma in Alliance Politics – helps explain why investment screening regimes rarely remain static after they are introduced. When a leading state imposes security-driven economic restrictions, its partners face pressure to align or risk strategic and commercial disadvantage.

When the US expanded CFIUS (Committee on Foreign Investment in the United States), authorities through the Foreign Investment Risk Review Modernization Act (FIRRMA) in 2018, it widened review powers over technology, infrastructure, and sensitive data transactions. The immediate effect was domestic. The secondary effect was external: allies now faced a coordination problem.

If partner-country firms could supply technologies that US firms were newly restricted from providing – in semiconductors, AI systems, or critical inputs – then US controls would impose unilateral economic costs while failing strategically. Alignment pressure followed naturally, both through formal diplomacy and market access realities.

The result was not instant uniformity, but coalition formation. The UK’s National Security and Investment Act came into force in 2021. Across the EU, member state adoption and strengthening national FDI screening mechanisms accelerated under the EU coordination framework after 2020. Japan, Australia, and others also expanded review authorities.

Different legal systems moved at different speeds, but in a common direction.

Once governments incur the initial political and administrative cost of alignment, further tightening becomes easier to justify domestically. Backtracking carries credibility costs. Incremental expansion becomes the path of least resistance.

For investors, this means that screening regimes behave less like isolated domestic regulations and more like mechanisms for coordinating an alliance.

The observable pattern so far

The sequence since 2018 shows a repeatable pattern rather than a one-off shock.

First comes a lead-country move justified on national security grounds. Next comes allied regime-building and legal harmonisation. Then comes scope expansion into adjacent sectors and technologies. Finally, enforcement intensity rises as regulatory capacity and political comfort increase.

In practice, sectoral coverage has broadened from traditional defence and critical infrastructure into semiconductors, advanced computing, AI, quantum technologies, sensitive data sets, and dual-use biotechnology. Transactions that would have drawn little attention five years ago now routinely trigger notifications or reviews across multiple jurisdictions.

There is also growing policy pressure on historically open financial and investment hubs to demonstrate comparable safeguards, particularly where technology or data exposure is involved. That pressure does not guarantee identical regimes everywhere, but it reduces the number of true regulatory safe harbours.

This is not mechanical convergence, but it is directional convergence.

Three practical implications for family offices

First, plan against direction, not just current rules:

Restriction regimes tend to widen through adjacency. When one technology category is controlled, regulators quickly examine neighbouring capabilities and supply chain dependencies. Family offices assessing cross-border investments should stress-test not only against screening thresholds, but against likely near-term scope extensions.

A useful working assumption is sequence-based: new jurisdictions often introduce or upgrade screening tools within a political cycle of major allied moves, and sectoral scope frequently expands within a year of high-profile controls in adjacent fields. That does not fix timing, but it improves preparedness.

Second, geographic diversification increasingly fails to deliver regulatory diversification:

Pre-2020, spreading investments across multiple developed jurisdictions often reduced regulatory concentration risk. Today, many advanced economies operate screening regimes with increasingly similar sectoral triggers and national security tests.

A portfolio diversified across the US, UK, major EU states, Japan, and Australia may still face correlated regulatory outcomes if those systems tighten in parallel. The key analytical question is no longer just “what are this country’s rules?” but “which regulatory coalition is this country aligning with, and how fast is that coalition moving?”

This calls for jurisdiction trajectory analysis, not static country checklists.

Third, timing capital deployment matters more in fast-moving regimes:

Traditional transaction structuring assumes relatively stable regulatory frameworks where careful design can secure approval. In an environment of rolling scope expansion, timing becomes as important as structure.

Investments completed before a sector is formally designated as sensitive may secure approvals – or avoid filings – that become harder later. Delayed deployment can mean entering after review thresholds tighten, conditions increase, or deal certainty falls.

For example, minority investments in advanced manufacturing or data-rich platform companies that cleared easily several years ago now often trigger multi-agency scrutiny and extended timelines. The regulatory friction changed faster than many valuation models.

Family offices should monitor leading indicators: parliamentary committee inquiries, draft legislation, interagency task forces, and public consultations on screening scope. These often signal tightening six to 12 months before formal implementation.

From scenario planning to trajectory analysis

Many family offices approach geopolitical risk through scenario planning – mapping multiple possible futures and assigning probabilities. This remains useful for elections, conflicts, and macro shocks.

Regulatory coalition tightening behaves differently. The uncertainty is less about direction than about pace and reach.

Trajectory analysis focuses on sequences and pressure points rather than binary outcomes. Not “will screening tighten?” but “what is the next likely layer of tightening, and what decision windows does that create?” Not “what if this country aligns?” but “what domestic and alliance incentives make alignment more likely within the next cycle?”

For investment committees, this shifts risk management from reactive to anticipatory. Instead of adjusting after each rule change, portfolios can be positioned with expected sequence moves in mind.

The takeaway

Alliance-informed analysis suggests that once security-driven investment screening coalitions form, they tend to broaden in membership, sectoral scope, and enforcement depth. The US-UK-EU trajectory since 2018 illustrates a pattern of directional tightening rather than isolated regulatory episodes.

For family offices, the practical discipline follows directly: stress-test exposures against coalition expansion, track jurisdiction alignment signals, and align capital deployment timing with regulatory windows where possible. Regulatory stability may prove more elusive than many models assume.

In a landscape shaped by alliance coordination and credibility costs, trajectory analysis provides a more actionable guide than static rulebooks or probability grids. It helps investors prepare not just for the rules that exist today, but for the ones that are most likely to arrive next.

About the author

Paul Hayman

Dr Paul Hayman, based in the UK northeast, is founder of Hayman Advisory, specialising in geopolitical trajectory analysis for family offices and institutional investors. He holds a PhD in international relations and an LLB, and has taught postgraduate students at QMUL and The Open University on China-West strategic competition and international policy analysis.