For the better part of the last 10 years, I have been acting as a buy-side investment advisor for a private equity fund located in Montreal, Canada.
Having previously worked in product development and corporate strategic planning, i entered the industry with my own set of preconceived notions regarding the private equity investment process. While I initially expected the due diligence process to essentially be a strategy-driven process accompanied by some financial analysis, legal and environmental considerations, I was surprised to find out that it wasn’t so. Most industry actors I met (selling business owners, financial intermediaries, consultants and many investment funds) actually treat due diligence as a glorified set of accounting and operational “audits”, with industry and market outlook being given a rather superficial, high-level lip service.
After researching industry best practices, I’ve come to realize that the underutilization of business strategy tools and frameworks within the due diligence process is a wide-spread phenomenon in the private equity/M&A sphere. The good news: the situation is getting increased attention from industry participants, and many are now acknowledging “strategic due diligence” as a key component of successful investment.
My aim with this blog is to share knowledge, stories, resources, ideas and tools that will hopefully help shape and improve your buy-side strategic due diligence process, regardless of your actual functions (private equity, mutual fund management, corporate M&A or any related activity). Let’s get started!