What is the investment committee’s due diligence process when evaluating a deal and the sponsor involved? – Ironton Capital

National Diversified Fund 7 is Live!

There’s a lot of steps. We’ll evaluate from 10 to 100+ sponsors to find one we like. A few of the steps include:

First, does the product the sponsor is developing have a clear market need?
Is the location have high population growth and a good tax advantages? If not, can we generate enough extra return to offset these disadvantages?
Next, do we believe the assumptions in their economic model match our assessment of the economy?
What if we have a big recession and a slow recovery? Will we have acceptable results?
What would have to go wrong for our investors to not get their initial investment back?
How many times has the Sponsor done a project like this? Have they done these projects in different phases of the economy?
Does the Sponsor have strong bank relationships? Lending is a particular challenge at the moment.

There’s more on the checklist, but that illustrates the point.

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