Operational Due Diligence: The Key to Strategic Business Solutions with David Emerson
Operational due diligence is a process that helps businesses identify and mitigate potential risks associated with new and current operations. By gaining an in-depth understanding of all aspects of a company, operational due diligence analysts can offer strategic solutions to clients.
In this episode, Tommy talks with David Emerson, Senior Vice President and Principal at LCG Associates. David joined LCG Associates in 2003 and is a member of the Board of Directors. He is also a member of the Risk Management Committee and Investment Committee. His responsibilities include leading client relationships with utilities, family offices, endowments, and foundations. Additionally, he conducts capital market and asset class research as well as investment manager due diligence.
David talks with Tommy about how LCG Consulting helps wealth managers make investment decisions, what operational due diligence is and how it works, and what are some of the key factors to consider when allocating assets in the private debt space.
Key Takeaways
- [01:20] - David's career prior to becoming an investment consultant.
- [05:37] - What led David to LCG Consulting.
- [06:53] - How LCG Consulting helps wealth managers make investment decisions.
- [09:50] - How David and his team provide value to their clients.
- [14:11] - Operational due diligence: what it is and how it works.
- [18:20] - LCG Consulting’s process for performing operational due diligence.
- [20:55] - What makes LCG Consulting unique from other consulting firms.
- [25:37] - What makes the right asset allocation in the private debt space.
- [31:23] - What is mezzanine financing or mezzanine debt.
Quotes
[11:26] - "The vast majority of investors out there don't have an operational due diligence team. Peers like ourselves, that's common. But take the utility or take a family office, they're not doing that level of operational diligence and they're typically going to outsource that." - David Emerson
[17:57] - "When you commit to a private equity firm or a private debt fund, you're making a long-term commitment. You're getting married to that fund and there isn't an easy divorce out of that if something goes wrong." - David Emerson
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Disclosure:
The views expressed in this podcast may not necessarily reflect the views of LCG Associates, Inc. and do not constitute research or recommendation advice or an offer or a solicitation to buy or sell any security or financial instrument. This material is for informational purposes. The opinions expressed are as of date of publication and are subject to change. The information and opinions contained in this material are not guaranteed as to accuracy or completeness. This material may contain ‘forward looking’ information that is not purely historical in nature. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the listener. Past performance is not indicative of current or future results. This information provided is neither tax nor legal advice and investors should consult with their own advisors before making investment decisions.
