Due Diligence – Reverse

Reverse due diligence is similar to investment and operational due diligence, but it is performed for the manager to help ensure that everything that clients typically look for is covered. This is particularly suitable for managers who are keen to adopt better operational and governance standards.

Typically, this would often happen as part of startup consulting or just prior to the launch of a new fund. It may help the manager and support staff to prepare for the onslaught of real clients conducting their own due diligence, and acts as a dry-run for that, as well as a useful process for evolving the due diligence questionnaire.

The exercise may result in an informal report, or a full scale report that may be used for clients to show what has been done, and that an independent party has examined the structure.