The private equity market continues to grow at an exceptional rate, especially following the COVID-19 pandemic. Investment management companies are facing the challenge of managing the massive amount of data in relation to investments that could be made. A virtual dataroom („VDR“) can be utilized to improve and speed up the due diligence process. A VDR can help PE firms perform a deeper analysis and evaluation of their market position, growth prospects and cash flows as well as the track records of potential investment targets.
A VDR can assist managers of investment close more profitable transactions in a less timeframe. It could make a huge difference to the bottom line. However there are some specific aspects that should be considered when choosing the right VDR for due diligence on private equity.
The VDR must offer a flexible and secure online platform to conduct due diligence on potential investments. It must allow users the possibility to upload, organize and share documents from any device that has Internet access. In addition, a complete due diligence workflow should be included. This should include Q&A tools and granular control of files and folders, as well as drag-and-drop upload capabilities for files.
A comprehensive analytics tool is also required to understand the progress of the transaction. This should include real-time information on the download of documents, user activities such as Q&A, engagement with customers and much more.