Co-Investment Due Diligence
Prior posts have touched on the level of modeling required for a co-investment alongside a fund (e.g. modifying GP assumptions and stress testing) but how much due diligence is performed prior to the investment? Do you get access to a data room or are you sent information from the sponsor? Management meetings? Also, how long does it take to diligence? 2-3 weeks? A few days? I assume the diligence process is a little bit more tame than direct investing but I don’t have any direct knowledge.
Based on my own experience, potential co-investors normally don't get access to the data room, but they will receive the investment memo, models, DD reports from the GP etc. However, if the co-investor wants access to the data room, I think it is possible, but don't think it will add a lot of value, because at the end of the day the co-investor is investing on the basis that the GP has a strong track record.
In terms of timing, it depends on how quickly the co-investors receive the information and how quickly the co-investors finish their analysis, the timeline and the size of the deal. 2 - 3 weeks sounds reasonable for a mid to large cap deal, assuming the co-investors were approached after all the DD process is complete.
Omnis nesciunt necessitatibus explicabo ut. Aperiam aut atque neque neque laudantium rerum non.
Aspernatur consectetur temporibus facere aperiam sunt nisi. Consequatur consequuntur placeat in cum quas. Ex libero animi officia nam a cum veniam nam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...