Due Diligence
Gain practical, deal-ready skills to confidently lead or support private equity transactions through every stage of the due diligence process.
Structure & duration
15-20 hours to complete
Online self-paced
Practical Skills Modules can be completed online at your own pace.
Prerequisites
We recommend candidates have passed CFA Level I or are otherwise familiar with financial modeling concepts, debt capital markets, and discounted cash flow analysis.
Available for Level III candidates.
Overview of Due Diligence
In the Private Markets and Due Diligence module, you will learn the essential skills required to evaluate and execute private equity transactions. You will explore how to identify promising investment opportunities, assess financial health, conduct legal and operational due diligence, value target companies, and develop effective exit strategies.
Due diligence in private markets is a cornerstone of successful investing. For professionals involved in private equity, venture capital, or direct investments, mastering the due diligence process is critical to identifying risks, uncovering value, and making informed investment decisions. This course equips you with the analytical frameworks and tools needed to operate confidently in the dynamic and complex world of private markets.
In this module, you will explore best practices across each phase of the deal lifecycle—from deal screening and financial modeling, to legal review, operational risk assessment, deal structuring, and post-investment monitoring. Through a series of step-by-step videos, illustrations, and knowledge checks, you will build practical expertise that can be applied immediately in real-world investment scenarios. Upon completion of this module, you will be ready to lead or support private equity transactions with a comprehensive understanding of the due diligence process.
Key learning objectives for Private Markets and Due Diligence
- Identify and evaluate potential investment targets through comprehensive deal screening and selection processes, utilizing market analysis and strategic frameworks.
- Conduct thorough financial due diligence to assess and mitigate financial risks, ensuring informed investment decisions.
- Understand and apply legal and tax due diligence processes to navigate regulatory requirements and protect investment interests.
- Analyze operational aspects of target companies to ensure post-investment efficiency and value creation.
- Develop valuation and deal structuring skills to optimize capital structures and achieve strategic investment goals.
- Implement effective monitoring and exit strategies to manage risks and maximize investment returns.
Key learning objectives by unit
- Learn how to assess industry conditions using frameworks like Porter’s Five Forces.
- Evaluate market size, growth drivers, and barriers to entry.
- Identify and screen potential acquisition targets based on market and financial data.
- Analyze geopolitical risk and its impact on investment suitability.
- Understand the purpose and structure of Letters of Intent in private market transactions.
- Review financial statements and identify trends in revenue, profitability, and leverage.
- Conduct detailed cash flow and earnings quality analysis.
- Assess working capital efficiency and liquidity risks.
- Perform stress testing and scenario analysis to evaluate financial resilience.
- Interpret due diligence findings to inform valuation and risk mitigation strategies.
- Explain how to best approach valuation as a senior practitioner.
- Examine the principles of stock valuation.
- Explore the limitations of multiples-based valuation methods.
- Explain the limitations of P/B, EV/Sales, EV/EBITDA and Dividend Yield valuation methods.
- Use reference class forecasting to improve valuation analysis.
- Derive a price target using a relative P/E multiple.
- Explain the pros and cons of cash flow valuation methods.
- Assess commercial arrangements, including supply chain dependencies and customer concentration.
- Evaluate data protection policies and IT infrastructure for operational continuity.
- Analyze HR practices and labor risk, including compliance with local employment laws.
- Develop strategies for talent retention and post-acquisition workforce integration.
- Use operational risk assessments to inform final deal terms and integration planning.
- Apply Discounted Cash Flow (DCF) and Comparable Company Analysis to determine intrinsic value.
- Structure capital using senior debt, subordinated debt, and hybrid instruments.
- Assess shareholder dynamics, governance risk, and succession planning.
- Quantify revenue, cost, and financial synergies in M&A.
- Evaluate pricing adjustments and financial covenants for final deal execution.
- Develop monitoring frameworks using KPIs and financial covenants to track portfolio performance.
- Perform risk assessments and stress testing post-acquisition.
- Evaluate common exit methods (IPO, strategic sale, dividend recap) and their suitability.
- Align exit strategies with market timing, investor goals, and company readiness.
- Plan and manage post-exit activities to ensure smooth transitions and value preservation.
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