Management Due Diligence reviews are used to evaluate the current team and are highly informative for external investors when looking at a business from the outside to evaluate an acquisition, merger, funding arrangement or joint venture.
The objective of management due diligence is to minimise risk and to ensure a return on investment. Whilst considerable financial and legal due diligence will be undertaken prior to an investment, the “people angle” is often not considered in depth.
Management due diligence can be a critical tool in assessing individual and team capability. It can also help to ensure that the team has a clear view of where the business is heading and how to achieve its business plan.