SD-04.3 — Investment Due Diligence (Direct)

Business Domain: BD-04 Direct & Co-Investment (Front office) · Applies: PRIV

Purpose

Runs the full diligence on a direct investment that has passed screening — the deep, verify-before-you-commit examination of the asset. Investment Due Diligence is one capability, but its operations branch by mode: diligencing a company, a building, an infrastructure project, a natural-resource asset and a direct loan are genuinely different examinations. The Service Domain is defined as the union of those operation sets, with no mode as the default — it is a coordinated diligence exercise whatever the asset.

Service Operations

Run company due diligence — the buyout workstreams: commercial and market diligence, financial diligence and quality-of-earnings analysis, legal, tax, operational, management, IT and ESG diligence.
Run real-estate due diligence — title and boundary survey, environmental site assessment, building-condition survey, zoning and planning verification, lease and rent-roll review, property-level underwriting.
Run infrastructure technical due diligence — the independent engineer’s assessment of asset condition, construction-risk and demand-forecast review, concession, regulatory and permitting review.
Run natural-resource due diligence — for timberland, farmland and producing energy or mining assets: soil, site and hydrology survey, environmental and biological assessment, harvest / crop / reserve modelling, and assessment of the specialist operator.
Underwrite credit — for a direct loan, the borrower’s debt-service capacity, collateral quality, covenant headroom, and downside / recovery analysis.
Build the diligence model — the integrated financial and underwriting model the investment case rests on.
Compile the diligence pack — the per-workstream reports, the risk register and the synthesised findings that feed the investment-committee memorandum.

Inputs and outputs

Inputs: the screened opportunity and indicative offer (SD-04.2); data-room access, management presentations, third-party advisers and expert networks.
Outputs: the due-diligence pack, the diligence model and the risk register — consumed by SD-04.4 Deal Structuring and SD-04.5 Investment Approval & Authorisation.

Entities

Consumes: Legal Entity (E-01, the target / borrower), Instrument / Asset (E-02), Direct Real Asset (RA-01), Appraisal (RA-05); the SD-04.2 screened opportunity and indicative offer.
Owns: none — the diligence pack is an analytical artefact.

Standards

Quality-of-earnings analysis for company diligence; Phase I / Phase II environmental site assessment for real estate; the independent engineer’s report for infrastructure; harvest / yield and reserve modelling and the environmental and sustainable-resource assessments for natural resources; the Four Cs of credit analysis for direct lending. No single standard spans the modes — the SD’s operation set is the union.

Open extensions

Whether the diligence operations warrant explicit per-mode operation sub-sets in the third level, or remain a documented union.
A Direct Investment / deal record entity carrying the diligence pack.