The due diligence process at Boardwalk Alternative Capital
At Boardwalk Alternative Capital (‘Boardwalk’) we source non-advised investment opportunities for our clients. The following provides greater insight into how investments are sourced and the subsequent due diligence (‘DD’) process.
On signing up to Boardwalk, it is the client’s responsibility to correctly categorise themselves. This ensures they only receive details of investment opportunities approved for their category of client.
Boardwalk does not provide advice. It makes available relevant publicly available documentation for its clients to consider. Clients must carry out their own due diligence to determine whether an investment is appropriate for them and make their own decision on whether to invest.
Clients must make themselves aware of all of the risks relating to an investment including, but not limited to:
- Loss of capital
- Limited or no liquidity
- Investments not being covered by the Financial Services Compensation Scheme
Boardwalk’s process begins with investment selection. Investment opportunities are typically sourced via our network made up of existing clients, Artorius shareholders, Artorius employees and corporate finance firms. Irrespective of how an opportunity is sourced, our process remains the same in terms of investment assessment.
Assessing the quality of an investment opportunity is clearly subjective and this is why each investment is subject to an Investment Committee approval vote. When assessing investment quality, we look at many aspects of the offer to establish whether they are reasonable. We would consider -
- the availability or otherwise of appropriate information for the deal available such as an information memorandum, financial model, valuation justification and proof of tax relief eligibility if relevant such as EIS advanced assurance
- whether the company is legitimate or fraudulent, using third party verification where possible
- If the structure of the investment seemed appropriate
- The investment case in the chosen market and whether it seemed reasonable
- Alignment of interest and whether there were any conflicts of interest
- The reasonableness of the exit strategy. Plans if there were a capital raising shortfall
- The nature of any introducer’s involvement. They may be purely a distributor or they could be co-investing or being appointed to a company Board position
- The company’s commitment to providing timely high-quality investor communications
Information obtained is not fact checked but all the assertions made by the investee are considered to ensure they are reasonable.
GrowthInvest Due Diligence
Following the Boardwalk investment assessment and a preliminary approval vote, GrowthInvest, our digital partner, carries out its own DD process. This covers aspects such as ensuring the administration documentation for the transaction is complete and appropriate. There are also third-party due diligence checks run on the company, and any significant parent organisations, and individual checks on at least two directors, as well as any Persons of Significant Control if they hold more than 25% of the share capital. Whilst there is a degree of overlap with the Boardwalk DD assessment, the two process are run completely independently. On satisfactory completion of the DD by GrowthInvest, an opportunity would then be submitted to the Investment Committee for approval or rejection. If approved, information about the investment is distributed to the relevant category of clients.
Following completion of a transaction, the GrowthInvest portal provides a strong monitoring capability. The use of a custodian enables efficient legal reporting lines of communication. This ensures investor updates and valuation changes are captured in a timely manner.
If an investment is not performing as we would expect, Boardwalk would ensure clients are receiving appropriate communication updates from the company/investment. We may also take reasonable steps to help an investment find solutions to its performance issues, such as through an introduction to a relevant counterparty.