Due Diligence: Simplified Using Cobalt LP
September 10, 2018
September 10, 2018
Conducting due diligence on a fund or manager is one of the most complex and time-consuming processes for an investor. It requires thorough analysis of track records and construction of meaningful charts.
Did you realize that you could streamline this workflow by conducting it directly in Cobalt? Here’s how we recommend conducting due diligence on a fund or manager through Cobalt
Due Diligence Step 1: Start in the Cobalt Funds in Market moduleD
The Funds in Market module is a comprehensive list of funds projected, actively fundraising, or having held an initial close. Use the available filters to quickly sort this list based on the type of fund you are interested in. Select a fund to get more information, such as the performance of other funds in this fund family.
Due Diligence Step 2: Use Cobalt's automated Fund Screening Report to quickly screen your fund and get more quantitative information
The Fund Screening Report allows you to search our database of historic funds without uploading any information. Don’t see the fund you’re looking for? You can also run this report using user-uploaded fund information. Customize this report even further by adding qualitative information and selecting your benchmark parameters.
This report can help answer questions such as:
- How has a general partner performed against an aggregate private market benchmark?
- Has a manager historically outperformed a public market index on a PME basis?
- Has a manager demonstrated effective management of the j-curve?
Due Diligence Step 3: Evaluate a fund or manager using Cobalt's Deal Intelligence Report
Determine how the manager is creating value by taking an even deeper look at the underlying investments (portfolio companies) for a fund. Easily upload company-level cash flows and operating metrics into Cobalt and evaluate them through the Deal Intelligence Report.
Using this report, quickly determine:
- What is the holding period for each underlying company investment?
- What sectors or deal team leaders have driven the highest returns?
- What does the valuation bridge say about how the manager has created value through EBITDA growth versus debt pay down?
Due Diligence Step 4: Make a Decision
At this point, you’ve utilized the resources found within Cobalt to efficiently:
- Screen a manager’s track record against public and private benchmarks.
- Evaluate a manager against a relevant peer set.
- Determine the sources of valuation creation within the manager’s track record.
Now that you have turned data into insightful information, you can make an investment choice with higher conviction.