System.OutOfMemoryException is thrown while still having free VM space

System.OutOfMemoryException is thrown while still having free VM space

Before asking, I'll make a small disclaimer: Yes, I am aware differences
between Virtual Memory, Physical Memory and Working Set. All the numbers
below refer to the virtual memory.
The situation is as follows: We have a 32-bit C# app, which imports x86
C++ libraries (with plenty of native dependencies, so migrating to x64 is
not an option at the moment). The app loads a large dataset through the
unmanaged component, and then tries to display it (report).
However, when the dataset is particularly large, an OutOfMemory exception
is thrown upon adding an item to the list. No surprise here. However, what
is surprising is the fact that the application still has around 280MB free
VM.
When debugging pure unmanaged apps (C++), it was never the case - the
bad_alloc could be only achieved if there was no free VM left, or if there
was no free address space chunk of sufficient size.
Hence, the question - what can be the reason of this? I understand how to
fight the issue - the unmanaged components really do eat a lot of memory,
as well as create a lot of fragmentation - but what is the reason for
OutOfMemoryException appearing so early?