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Due Diligence Checklist: Fund

by Deer Isle Group Jan 18, 2023

SAMPLE DUE DILIGENCE CHECKLIST

FUND

Purpose

The purpose of an investment due diligence checklist is for an investor to make sure that they have completed full due diligence on a potential investment opportunity. In addition, to the extent that an investment bank or broker/dealer is utilized in a capital raise, the investment bank or broker/dealer is required, by regulation, to complete their own due diligence process before offering a potential investment opportunity to potential investors.   The due diligence that the investment bank or broker/dealer uses in their process will also be used by investors for their investment decision making.

In order for an investor to make a well-informed investment decision especially when they are giving someone else investment decision making discretion, they typically have a standard set of questions and required information that they need to review before they are willing to make an investment. The areas covered in a due diligence checklist are related to helping an investor make a reasonable decision about the risk adjusted return of an investment opportunity.

CAPITAL SEEKER/ISSUER PROVIDESINVESTOR GOAL 
Transparency in order to allow an investor access to complete information Maximum transparency in order to make an informed investment decision
Information that supports investment return potential Demonstrate return potential
Risk and mitigation informationUnderstand and mitigate potential risks


Covered Topics

A Fund Due Diligence checklist typically covers Fund as well as Company standard topics such as (see full sample due diligence checklist here):

  • Fund Documents
  • Governance and Team
  • References
  • Presentations/Investor Communications/DDQ:
  • Investment Pipeline/Current/Past Transaction
  • Investment Process
  • Fund Reporting
  • Research
  • Leverage/Unique Financial Structures
  • Fund Manager Corporate Information
  • Fund Manager Regulatory, Compliance and Operations

Having well-constructed and complete information on these basic topics provide the information that an investor required to complete their due diligence process.

Result

The result of well-constructed and complete due diligence information is a seamless and well received capital raising process which increases a capital seeker/issuer’s chances to raise capital. Investors respect and appreciate thoughtful due diligence information since it shortens their due diligence process significantly meaning they are able to make an investment decision more quickly. 

Given most capital seeker / issuer’s preference for a quick and seamless capital raise as well as investor and capital seeker / issuer’s interest to have a seamless due diligence process, the capital seeker /issuer and investors interests are aligned in having complete due diligence information.

Contact Us:

Deer Isle Group

info@deerislegroup.com

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Founded in 2007, Deer Isle is an innovative investment bank that equips capital market participants with the tools they need for transparent, seamless, and efficient capital markets transaction success.

Since our inception, we have facilitated over $5 billion in capital transactions through Deer Isle Capital, LLC—our FINRA-registered broker-dealer—for companies and funds across various security types, sectors, and geographies.

At the core of our approach are effective, unbundled capital solutions, offering expertise and guidance that can be customized to meet each client’s unique needs. Our services, available on an "as-needed" basis, include:

  • Strategic Capital ConsultingTM (“Outsourced Strategic CFO services, Deer Isle Executive Management/Board Bootcamp or Sprint”) to prepare for a capital or M&A transaction leveraging the Deer Isle proprietary AI enhanced 4 pillar capital framework and real-world experience.
  • Beacon (“Proprietary Technology”) offers White-label and Turnkey Capital Provider engagementwith customized content and data analyticsfrom a relevant subset from a universe of 17,000+ institutional (fiduciary) capital markets organizations/50,000+ institutional capital market people.
  • Closing Advisory/Guidance (including “Shepherding”) expertise, through Deer Isle Capital, for structuring, negotiating, and completing a successful capital/M&A transaction.