due diligence

Revisiting Due Diligence for Private Market Investments

by Edward Robertson
 

In the eyes of the investor, the due diligence (DD) process carried out by Exempt Market Dealers (EMDs) for private market investment products seems very problematic.

CHALLENGES

First is the question of motivation of EMDs and their representatives. Motivation can be oriented more towards immediate profitability of the EMD rather than towards safeguarding the financial soundness of the product issuer. For example, an EMD may select an issuer on the basis of an inordinate commission or preferential terms, or charge a high fee for conducting due diligence. From the perspective of the EMD, it is difficult to maintain a viable operation without somehow looking out for its own interests.

Due diligence: the deal structure

by Edward Robertson
[Note: this article was re-published under the title: "Deal Structure: A Key Concept When Exploring Private Investments" for The Private Investor Issue 21, July 2017.]

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