The primary goal of our direct investment decision-making process is to identify those investments that we believe have the best risk/return profile.  When constructing the portfolio of direct investments, we also take into consideration the industry sector, company size, geography, and year of investment. 

Investment Selection Process
We focus on the fundamental characteristics of the deal, including proposed financing structure, valuation, business model, credibility of operating projections, competitive landscape, and management team.  Our team also contacts other private equity firms that are or were analyzing the deal and are familiar with the industry, as well as key management of similar companies within the HarbourVest fund-of-funds network.  This network of references is vital to the due diligence process. 

In addition, if we are investing alongside another fund manager, our team evaluates the manager’s track record and experience in the specific sector, the track record of the individual partner, and whether the investment thesis (consolidation play, buy-and-build, financial engineering, or turnaround) of this particular transaction is consistent with the manager’s expertise. 

The direct team relies on our firm’s broader resources when conducting due diligence.  The primary and secondary teams and the information tracked in our proprietary partnership database can provide valuable background and data on co-investors and existing portfolio companies.  Much of this information is unique, and only available because of the information and relationships we have built over the years.