Dig deep: The future of due diligence in Europe

Report 19 May

Dig deep: The future of due diligence in Europe

100 European dealmakers on due diligence strategies, challenges and emerging trends

European dealmakers are feeling massive pressure on multiple fronts. Not only have they had to navigate the COVID-19 crisis, but they are also tasked with addressing a range of non-pandemic-related issues: regulatory changes, ESG issues, technology disruption and cyber and geopolitical risks, to name a few. All these factors mean that a comprehensive due diligence strategy has never been more important.

To get a clearer picture of due diligence strategies in Europe, we surveyed 100 dealmakers across the continent to find out how the pandemic altered their approach, the challenges they are facing and emerging trends to watch out for.

Key findings include:

  • COVID-19 lengthens deal processes. Reflecting on the pandemic’s impact, 29% of respondents report that due diligence has taken between one and three months longer than usual.
  • Mixed picture on resourcing. In current circumstances, around half of respondents (47%) are dedicating more resources to due diligence. Interestingly, though, 35% report they are now dedicating fewer resources to due diligence.
  • Technology leads the pack. The type of due diligence that respondents say is currently being most emphasised is technology due diligence, cited by 30% as the priority. Cybersecurity, ESG and human resources due diligence are at the bottom of the list at the moment.
  • Outsourcing on the up and up. When it comes to due diligence, our respondents seem to prefer outsourcing: 39% say they mostly outsourced these functions in their most recent deal, while 13% report they outsourced all due diligence functions.
  • Spotlight on ESG. Just under three-quarters of respondents (72%) expect ESG due diligence to come under much more scrutiny over the next couple of years.
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