Making It Happen
The foundation of a successful due diligence process is a structured process, a proven evaluation framework, and an experienced team. Some valuable aspects are:
In-depth knowledge of past fund investments, their business and investment performance, and the fund manager’s value creation is crucial for the evaluation and the understanding of a private equity fund’s offering.
Broad sharing of the investment project work among all investment team members ensures the quality of the due diligence process, and a consistent investment philosophy across the firm.
Well-prepared reference calls provide an excellent perspective on how a fund manager creates value.
An experienced senior professional acting as devil’s advocate on an investment project provides valuable, internal challenging and risk mitigation.
1 Sood, Varun. “Investment strategies in private equity.” Journal of Private Equity 6:3 (Summer 2003): 45–47. Online at: dx.doi.org/10.3905/jpe.2003.320050
2 Mayer and Mathonet, 2005.
3 Fictitious fund example, based on actual cases.
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