Full Due Diligence Process

The due diligence process is led by the GSA partners with support from the investment staff. We recognize that the critical issues which require the most in-depth evaluation can vary dramatically from one opportunity to the next. GSA's team has the experience and resources to quickly identify and evaluate the most important of these issues. Information requests are based on what is truly relevant to the decision.

The overriding factor in selecting partnerships is clearly the expected future financial performance of the team. GSA uses an internal checklist composed of the underlying criteria that further define expected future performance of an investment opportunity.

Performance is evaluated according to the lifecycle stage of a fund:

• For teams with well established track records, GSA verifies the realized performance, analyzes the unrealized investments and determines if the performance can be sustained
• For new and emerging teams, GSA will review the past performance of individual team members, analyze any unrealized investments and focus on the team's compatibility and strategy versus their competitors

The organizational and managerial structure of the fund is also assessed:

• Based on its confidential, independent sources of due diligence, GSA will frequently know which team members are responsible for transactions and is often aware of potential instability within a team well before the current limited partners
• Grove Street is well positioned to evaluate the appropriateness of an organizational structure and the interpersonal dynamics of a firm
• Issues such as the depth of the team, succession, turnover, compensation, vesting and workload are evaluated

Reference checks at this stage include a wide range of sources including co-investors, CEOs and CFOs of portfolio companies, auditors, limited partners, competitors and others. At this stage, GSA will generally request the fund's audited financial statements and quarterly statements.