Due Diligence

Due Diligence - Yangon City Burma
Due Diligence

Due diligence is quantitative and qualitative investigation and verification into the business practice, operations, financial statements, and legal details of a prospective business client or associate.

This process is generally done prior to a business relationship being established; however, routine investigations of existing relationships can also be beneficial in uncovering pertinent information.

A due diligence investigation reduces risk associated with conducting business with other individuals or companies by ensuring their credibility and accurate portrayal.


These examinations may expose disparaging details that could ultimately hinder a business affiliation. Failure to conduct proper due diligence can lead to false representation of a party involved in a relationship, potential monetary loss, as well as litigation.

Due diligence is of great importance in the hedge fund space with the lack of transparency and regulation. A major characteristic of these private investment vehicles is that they have an aversion to divulging information on investment processes and market positions. Proper due diligence may mitigate some of these information asymmetries as well as protect an investment.

This process has numerous components and can include (but not limited to):
  • Credibility assessment of the particular company and executives
  • On-site visitation and verification of internal control systems
  • Independent research for any publicly printed information about the company and officers
  • Research and overview of third-party service providers
  • Check of past, pending, or current litigations
  • Overview of financial statements