Sun, Jan 1, 2012

Private Equity Into High-Risk Markets — the Need for a New Due Diligence Approach

Ninety-eight percent of UK private equity firms agree that traditional due diligence is inadequate for emerging market investments – yet they are not sufficiently adapting their approach.

The report, published by Kroll and Mergermarket, polls 50 UK-based private equity investors on their experience in emerging markets to uncover the most common obstacles presented in these jurisdictions.

The results, detailed in this report, show that:

  • There will be a continued, if not increased, focus on investment in emerging & frontier markets.
  • Respondents overwhelmingly agree (98%), that conducting due diligence on targets in emerging markets requires a different approach.
  • Nonetheless, few PE firms have adapted their diligence approach to emerging & frontier markets, opting instead to increase legal and tax due diligence.

Compliance Risk and Diligence

The Kroll Investigations, Diligence and Compliance team partners with clients to anticipate, detect and manage regulatory and reputational risks associated with global ethics and compliance obligations.