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Learning the lessons of overseas investment

Look before you leap 2006


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Learning the lessons of overseas investmentFor the past seven years, Deloitte has been talking to a sample of Europe’s top infrastructure companies – such as construction firms and power providers – about the precautions they take before investing in the emerging markets of Eastern Europe, Asia, Africa and Latin America. While these markets may offer many attractive investment opportunities, they can also present significantly higher risks than the company’s home market, with unprepared investors running the risk of exposure to corruption, poor management and political interference. In response to these increased risks, many companies consider safeguarding their interests by conducting a type of due diligence over and above that which solely addresses the company’s financial condition prior to an investment – namely, Integrity Due Diligence - and an assessment of the risks attached to the country, and sector, of investment.

In 1999, in our first survey, we found that many companies were neglecting to check important issues such as a target company’s political affiliations and reputation and thus failing to address their potential exposure to them as investors. In this report we will look at how the situation has progressed since 1999, and how Integrity Due Diligence – specifically, a thorough look at the background, track record, and reputation of the investment target - now forms a vital part of the due diligence process for investors entering new markets.

To find out more download Look before you leap 2006 (PDF, 854 KB)

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