Private Equity investments are hitting record highs, your guide to PE due diligence

With interest rates dropping and cash reserves overflowing, a jump in private equity investments is expected in the coming months. In fact, 2024 is forecasted to hit record numbers when it comes to the purchase of secondaries, beating 2023’s total of $114 billion. Got extra dry powder on your hands you’re looking to invest before the year wraps? Intelligo is here to guide you, ensuring your investment partners are on the up and up before smashing the buy button. 

In addition to the considerate cash reserves, private equity investments are trending thanks to higher buyer optimism, healthy public market performance, and profitable exit activity. According to an Institutional Investor article, “Prices for buyout stakes improved by more than 2 percent year-over-year, reaching 94 percent of the net asset value of funds, the highest level since 2021.”

When your firm has found what looks to be a good investment, it’s crucial to perform fast but meticulous due diligence to ensure the investment is solid while helping you determine an appropriate price. You’ll want to look into the target company’s finance, legal, tax, management team, and assets before proceeding. You can also unearth any potential risks and opportunities to help you seal the best deal and formulate a successful business plan. Enhanced due diligence into the company itself and key personnel can also dig up any red flags, so you don’t wind up with a company that has been involved in morally questionable or illegal activities. 

Since many target companies aren’t publicly listed, the CIM or confidential information memorandum is crucial to arm you with the information needed to perform thorough due diligence. While the CIM contains financial data, broad strokes on the management team, as well as commercial insights, you’ll need to vet the accuracy of all information provided by your target company through targeted public records research. 

With your firm’s investment strategy as your north star guiding your process, one size definitely does not fit all when it comes to private equity investment due diligence and you’ll need a flexible and adaptable approach to cater to all the nuances each target company can bring. Intelligo provides scalable and customizable services that can accommodate each target and their distinct challenges that could arise along the way. 

Let’s say you start with one level of screening during your exploratory phase and uncover information that requires a deeper dive during confirmatory due diligence. Intelligo lets you switch and upgrade your service at any time, with a suite of options that range in speed and complexity. We can also customize the experience as you see fit, serving up the results on an easy to use dashboard that gets you to the bottom line fast. Whether you’re assessing target companies of commercial, IT, legal, financial or management and operations, Intelligo has you covered with a one of a kind due diligence process to fit all your firm's needs. Schedule your free demo today and you’ll be offloading some of that dry powder in no time.