Private Equity Risk - Due Diligence Training Course

Private Equity Risk - Due Diligence Training Course

Introduction

The landscape of Private Equity (PE) investing is defined by high reward potential, but is fundamentally predicated on effective risk mitigation and robust pre-acquisition analysis. In today’s complex and volatile global economy, a deal’s success hinges on a meticulous, multi-disciplinary Due Diligence (DD) process that extends far beyond traditional financial checks. Investors and deal teams must navigate increasingly critical areas, including Operational Efficiency, Cybersecurity Risk, and Environmental, Social, and Governance (ESG) factors, all of which are crucial for generating sustainable alpha. Private Equity Risk - Due Diligence Training Course provides the advanced analytical toolkit necessary to identify, quantify, and strategically address these hidden and emergent risks, ensuring capital protection and maximizing value creation across the entire investment lifecycle.

This intensive training program is specifically designed to transform practitioners into expert risk assessors, capable of leading and managing end-to-end PE transactions. Leveraging real-world case studies and best practice methodologies, participants will master the specialized techniques of Quality of Earnings (QoE) analysis, commercial validation, and the integration of digital and technology due diligence. The program’s focus on practical application and structured frameworks will equip participants to challenge assumptions, negotiate better terms, and confidently present a holistic risk profile to the Investment Committee. Master deal structuring and post-acquisition integration planning by turning identified risks into actionable value-add opportunities.

Course Duration

5 days

Course Objectives

Upon completion, participants will be able to:

1. Validate and adjust the target company’s sustainable Quality of Earnings (QoE) for accurate valuation.
2. Identify and quantify hidden liabilities and off-balance-sheet risks through advanced financial due diligence.
3. Design a comprehensive, multi-stream Due Diligence Framework incorporating financial, legal, commercial, and operational components.
4. Assess and mitigate Cybersecurity Risk and IT Resilience of a target company's infrastructure and data.
5. Conduct a thorough Commercial Due Diligence to validate the Total Addressable Market (TAM) and competitive positioning.
6. Evaluate the integration of Environmental, Social, and Governance (ESG) factors into the DD process and long-term value creation plan.
7. Analyze LBO Modeling sensitivity and assess the structural Debt Capacity and leverage risk.
8. Formulate a risk-adjusted Investment Thesis and present a concise, actionable risk report to the Investment Committee.
9. Scrutinize and validate key operational drivers, including Working Capital normalization and CapEx requirements.
10. Develop a Post-Acquisition Integration roadmap that proactively addresses operational and organizational risks.
11. Examine Management Team capabilities and alignment of incentives
12. Navigate complex international or cross-border deal-specific risks, including regulatory compliance and geopolitical risk.
13. Apply scenario and Sensitivity Analysis to projected cash flows for robust stress testing and decision-making.

Target Audience

1. Private Equity Associates and Vice Presidents
2. Investment Banking Analysts and M&A Professionals
3. Corporate Development and Strategy Directors
4. CFOs and Senior Finance Managers of target/portfolio companies
5. Risk Management and Compliance Officers in financial institutions
6. Independent Consultants specializing in M&A or Transaction Services
7. Limited Partners (LPs) focused on fund-level operational due diligence
8. Venture Capital (VC) and Growth Equity Investors

Course Modules

Module 1: Foundational Risk in the PE Lifecycle

• PE Fund Structure and Alignment of Interests.
• The Investment Thesis.
• Gatekeeping Risk.
• Overview of the Due Diligence Funnel and Phases.
• Case Study: The importance of screening out an early-stage company with high Key Person Risk.

Module 2: Advanced Financial Due Diligence and QoE

• Analyzing Quality of Earnings (QoE).
• Identifying Non-Recurring Items and Aggressive Accounting Practices.
• Deep Dive into Working Capital and Debt-Like Items.
• Stress Testing Financial Projections.
• Case Study: Recasting a target company’s financials to uncover significant, un-funded Contingent Liabilities that altered the valuation.

Module 3: Operational and Commercial DD

• Assessing Operational Efficiency.
• Commercial Validation.
• Reviewing the Supply Chain and Geopolitical Dependency Risk.
• Evaluating Product/Service Profitability and Unit Economics.
• Case Study: Analyzing a manufacturing company where supply chain single-sourcing created unacceptable Business Continuity Risk.

Module 4: Legal and Regulatory Due Diligence

• Identifying "Change of Control" and other Deal-Breaking Clauses.
• Assessing Intellectual Property (IP) Ownership and Protection Risks.
• Reviewing Litigation History and Compliance with Industry Regulations.
• Understanding and mitigating Anti-Trust and Foreign Investment Review risks.
• Case Study: An acquisition where inadequate IP protection was identified, necessitating a mandatory Representations and Warranties insurance clause.

Module 5: Technology, IT, and Cybersecurity Risk

• IT Due Diligence.
• Assessing Data Security Frameworks and Vulnerability to Breaches.
• Reviewing Digital Transformation readiness and CapEx requirements.
• Cybersecurity Risk Scorecard and Third-Party Vendor Risk.
• Case Study: Identifying a target's outdated technology stack and the high-cost integration risk it posed to the buyer's systems.

Module 6: Human Capital and Governance Due Diligence

• Assessing Management Team Fit and Retention Risk.
• Reviewing Compensation, Benefits, and Employee Relations Issues.
• Analyzing Organizational Structure and Key Talent Gaps.
• Evaluating Corporate Governance and Board Effectiveness.
• Case Study: A deal that faltered due to a misaligned incentive structure for the senior management team post-acquisition.

Module 7: ESG and Emerging Risks

• Integrating Environmental, Social, and Governance Metrics into DD.
• Identifying Climate Transition Risk and Materiality Assessment.
• Evaluating Reputational Risk and Social License to Operate.
• The role of ESG in attracting Limited Partner capital.
• Case Study: Quantifying the regulatory and financial cost of non-compliance with new Sustainability Reporting standards for a European target.

Module 8: Transaction Execution and Risk Mitigation

• Structuring the Deal.
• Effective Negotiation Strategies based on DD Findings.
• Developing the 100-Day Plan for immediate risk mitigation and value capture.
• Post-Investment Monitoring and Control Frameworks.
• Case Study: Successful negotiation of a lower purchase multiple and a large escrow based on identified Environmental Liabilities.

Training Methodology

This course employs a participatory and hands-on approach to ensure practical learning, including:

• Interactive lectures and presentations.
• Group discussions and brainstorming sessions.
• Hands-on exercises using real-world datasets.
• Role-playing and scenario-based simulations.
• Analysis of case studies to bridge theory and practice.
• Peer-to-peer learning and networking.
• Expert-led Q&A sessions.
• Continuous feedback and personalized guidance.

Register as a group from 3 participants for a Discount

Send us an email: info@datastatresearch.org or call +254724527104 

Certification

Upon successful completion of this training, participants will be issued with a globally- recognized certificate.

Tailor-Made Course

 We also offer tailor-made courses based on your needs.

Key Notes

a. The participant must be conversant with English.

b. Upon completion of training the participant will be issued with an Authorized Training Certificate

c. Course duration is flexible and the contents can be modified to fit any number of days.

d. The course fee includes facilitation training materials, 2 coffee breaks, buffet lunch and A Certificate upon successful completion of Training.

e. One-year post-training support Consultation and Coaching provided after the course.

f. Payment should be done at least a week before commence of the training, to DATASTAT CONSULTANCY LTD account, as indicated in the invoice so as to enable us prepare better for you.