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China PE Due Diligence Best Practice: The Big Picture
On January 16, 2013
This is the first article in a series of five were we present our take on how the most effective PE firms approach due diligence in China.
1. Maintain strict standards
Successful fund managers never compromise their investment principles to “do a deal”. They stick to their strict standards even when there is pressure on the fund to put money to work. Fund managers who lower their standards might get deals done, but their reputation will suffer in the long run as their portfolios fill with troubled companies.
2. Strengthen fundamentals
Leading funds gain competitive advantage by strengthening fundamentals. They increase their deal sourcing efforts by spending more time actively identifying and pursuing high potential companies. They strengthen their ability to add value to portfolio companies and market these abilities to potential Targets.
Read the other posts in our series how the most effective private equity firms approach due diligence in China:
- China PE Due Diligence ‘Best Practice’: Due Diligence Strategy
- China PE Due Diligence ‘Best Practice’: Strategic Due Diligence
- China PE Due Diligence ‘Best Practice’: Strategic Due Diligence Execution
- China PE Due Diligence ‘Best Practice’: The Human Factor
Our ViewOur team-members' views and reflections on China-related mergers and acquisitions (M&A) – including inbound foreign investment and outbound Chinese M&A – and other China-related business issues.