We adhere to a rigorous due diligence process characterized by a disciplined, systematic approach. For fund investments, the process begins with our detailed questionnaire with over 100 unique inquiries. We analyze a private equity fund’s strategy to assess whether its strategy is well-positioned to deliver strong returns. We use quantitative tools to analyze and stress the fund’s track record. We make extensive reference checks to verify the team’s reputation and capacity to add value. To enhance maximum investor/limited partner protection and value, we negotiate key terms and investment provisions. We also evaluate any potential conflicts of interest to ensure that the general partner and limited partner’s interests are aligned.
For direct equity investments and opportunistic credit investments, we work intently with the lead manager to analyze the investment opportunity. We quickly mobilize our resources to understand the industry dynamics and market trends. The management teams are critical, so we personally interview them to get comfortable that they are pursuing strategies for generating value. We create our own financial models and generate multiple scenarios to understand the risks. Once the key risks are identified, we ensure that anticipated returns justify the risk and that the proper risk mitigation processes are in place to limit the downside.
Portfolio Construction
Constitution Capital selectively makes commitments to a group of premier lower middle market private equity funds. Each year, we screen potential fund managers and ultimately select a concentrated, yet diversified group of investments for our partnership funds. We do not segment the market. We believe our approach provides investors with the opportunity to earn exceptional returns, while diversifying across companies, industries, managers, and vintage year.
