Against the bleak backdrop of a post-pandemic world, emerging managers are under immense pressure to overcome market challenges no one could have ever predicted – the most devastating economic downturn since the global financial crisis of 2008.
But there is a silver lining. While raising new funds may have become more difficult under the prevailing climate of uncertainty, the timing has never been better. When the dust starts to settle and markets are primed for recovery, emerging managers are expected to gain from the expected drop in asset valuations.
Emerging managers are typically nimbler and more resourceful during periods of disruption as they are not encumbered by legacy portfolios. Instead, they are aimed at detecting new market opportunities that show all the signs for attractive returns.
According to recent survey reports, 91% of emerging managers expect to continue being active dealmakers despite the recent market disruption, seeking to gain opportunities despite the crisis. This reveals a remarkably eager and optimistic mindset among new fund managers amidst an increasingly competitive environment.
The definition of emerging managers would generally include newly formed or relatively small firms who are at the early stages of their life cycle, managers raising funds for the first or second time, or firms that are managing relatively smaller funds (usually pegged at no more than US$100 Million in total assets).
Emerging managers usually start with their own money, but the real key to their continued growth and success lies in their ability to attract investors and raise capital.
In the investment industry, new fund managers are known to drive innovation and diversity. Emerging funds have shown greater flexibility in responding to current market conditions as compared to more tenured funds, with emerging managers able to execute new ideas and transactions at a quicker pace.
As with any other asset management firm, emerging managers need to set up their funds in compliance with legal and regulatory requirements, in order to improve governance, ensure stability, and minimize risks.
Veritas Global offers a full range of services to help optimize the capabilities of emerging managers, from due diligence and oversight, to business-oriented legal advice and technology-based solutions, backed by years of proven performance and in-depth knowledge in partnering with private equity, venture capital and alternative asset class investment firms all over the world
In the realm of corporate law, due diligence may be defined as “the process of conducting an intensive investigation of a corporation as one of the first steps in a pending merger or acquisition.”
In business, there are two situations that would require the performance of due diligence — one is on the sale and purchase of products or services, and the other involves mergers, acquisitions, and partnerships among corporate entities.
From the perspective of mergers and acquisitions, due diligence entails a full understanding and disclosure of all legal and financial obligations of the target company, such as debts, pending and potential lawsuits, leases, warranties, long-term customer agreements, distribution agreements, intellectual property rights, environmental practices, employment contracts and compensation arrangements, among others.
This meticulous audit and investigation is done to thoroughly assess the current status of the target company, as well as the legal and financial implications they present should the client push through with the potential transaction.
Due diligence services are usually requested by buyers or investors in order to discover hidden information about the company they are eyeing to purchase or finance. As the Latin expression “caveat emptor” suggests, it is a generally accepted rule that the buyer must take all the necessary precautions and perform due diligence before signing off on a deal.
On the other hand, sellers are also encouraged to perform “reverse due diligence” to assess their company’s readiness to go up for sale, and to help them evaluate the background and capabilities of prospective buyers, partners, or investors.
No matter which side of the transaction you find yourself in, due diligence empowers corporate leaders to arrive at gainful, strategic, and informed decisions that would maximize value and minimize risks.
There are various types of due diligence, each with their particular focus of inquiry. The most commonly performed due diligence investigations usually cover the following areas of concern:
Performing due diligence is often a tedious, meticulous, time-consuming, and complex process that requires combing through volumes of data and information, as well as interviews and on-site inspections. While there is a sense of urgency to get the job done as soon as possible, there is no room for short-cuts or guesswork. A simple oversight can easily escalate into a complex and costly mistake.
In conducting due diligence, business leaders would benefit immensely from expert assistance and advise from experienced legal professionals who are committed to helping you achieve your goals.
Veritas Global can help you through the entire due diligence process and provide you with clear, comprehensive, and credible solutions at every turn.
Phone: (804) 250-3249
Email: corey@vglawfirm.com
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