Delivering Growth and Opportunity

Deal Intelligence and Due Diligence - Country and Sector

 

Deal Intelligence and Due Diligence - Country and Sector

 

Political and economic intelligence - Scenario planning - Foreign investment screening

 

Control Risks has one of the largest in-house teams of political risk analysts. We provide optimum visibility of the risks and rewards associated with specific transactions, so you can avoid wasting time and resources pursuing unproductive ventures. Our diverse, global team is a rigorously vetted network of political analysts, policy specialists, former public officials, diplomats and journalists.

 

Political and economic intelligence

Our analyst team supports pre-investment due diligence processes and longer-term investment planning by providing in-depth and independent intelligence and analysis about the impact of political and economic developments on a specific transaction or target company. This includes helping you identify key local stakeholders and consider the experiences of other firms who have faced the same challenges.


Scenario planning 

Major global events can change the underlying business environment in the jurisdictions where a target company or its supply chains operate. We facilitate scenario and red-teaming workshops to thoroughly test your core assumptions about a specific investment or target company. This helps you consider the impact of potential political and regulatory developments on a target’s revenue streams or cost-base as well as your exit strategy.

 

Foreign investment screening  

Applying our understanding of political risk and national security considerations, we gather information and intelligence to reduce execution risk. Our offerings include due diligence into buyers or sellers, location mapping of assets and infrastructure, evaluation of the potential for national security concerns, and scenario building and contingency planning for national security review by different governments. 

Based on our assessment of national security risks, we can also help evaluate mitigation options to reduce execution risk or respond to stated mitigation requirements, inform budget planning for possible mitigation options, and assist with the development and implementation of compliance assessment and monitoring plans.

After a transaction has been approved, Control Risks can conduct independent audits to evaluate the target’s compliance with the stated mitigation terms of stipulation agreements (including national security or forced divestiture) and also act as an independent monitor to evaluate compliance.

Case studies

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Intelligence on political ties and internal dynamics of an Indian conglomerate

A regional institutional investor was considering an investing in a leading Indian infrastructure development company that was part of a family-run conglomerate. 

Case study

Intelligence on political ties and internal dynamics of an Indian conglomerate
The situation

A regional institutional investor was considering an investing in a leading Indian infrastructure development company that was part of a family-run conglomerate. Along with needing to understand any reputational or integrity risks, the client sought insight into the relationship between the family’s political associations as well as insight into any issues that might arise from local or national politics.
 

Our approach

Our investigation found the target company’s reputation compared favourably to its closest competitors and that the company had taken considerable steps to improve its corporate governance. We mapped potential risks, such as perception issues about the target company’s close ties to the previous ruling party. We also identified risks stemming from dynamics between family members over future control of the company, mapping different scenarios for each potential successor.
 

The outcome

Our deep understanding of the local, national and regional political landscape gave the client a comprehensive awareness of the context in which the target company was operating. The client could now move ahead with confidence in their ability to be agile in response to sudden internal or external shifts.

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Political and reputational assessment of a Vietnamese education business

A leading regional private equity firm was considering investing in a fast-growing Vietnamese education business. 

Case study

Political and reputational assessment of a Vietnamese education business 
The situation

A leading regional private equity firm was considering investing in a fast-growing Vietnamese education business. This was the client’s first investment in Vietnam, so they needed comprehensive guidance on the political and business environment. 
 

Our approach

We provided an intelligence-led assessment of the local political and regulatory outlook, putting our detailed reputational assessment of the target company in context for the client. We helped the client identify key stakeholders in education sector policymaking, helping our client fully understand their broad plans and disposition towards foreign investment. We also mapped out whether certain key policies and regulations specific to the investment were likely to be implemented and the potential for these to impact growth post-transaction.
 

The outcome

Our on-the-ground expertise and extensive, sector-specific understanding of the evolving political and regulatory outlook gave our client the background to approach the investment with an informed balance of caution and confidence. Our client was able to move forward with an awareness of nuance that might otherwise have taken years of in-country operation to attain.

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Reputational risk and civil conflict intelligence in the South Sudan oil industry

A European emerging markets private equity fund was considering investing in the South Sudan oil industry.

Case study

Reputational risk and civil conflict intelligence in the South Sudan oil industry
The situation

A European emerging markets private equity fund was considering investing in the South Sudan oil industry. With no prior experience doing business in South Sudan, the fund knew they would need a better understanding of the country context, particularly regarding civil conflict. The fund was especially concerned about reputational risks to international businesses.
 

Our approach

Drawing on extensive in-country knowledge, Control Risks conducted research and provided intelligence on the drivers behind civil conflict in South Sudan. This included analysis of peace negotiations and potential outcomes, allegations of human rights abuses by the government, and an in-depth survey of the security environment. We provided focused analysis on the oil industry, looking at management and oil-revenue flows to identify any issues that might directly impact our client’s proposed investments. We then ranked the proposed investments, highlighting potential exposure to reputational risks and other integrity issues.
 

The outcome

Following our assessment, we discussed its key findings with the fund’s transaction team, providing additional advice on risks associated with the proposed investments. With a comprehensive awareness of the realities of operating in South Sudan, the fund was able to accurately prioritise potential integrity issues in their approach to the deal. Ultimately, the company made an informed decision not to go ahead with the deal.

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Scenario planning and political intelligence in the Spanish energy market

A major pension and asset-management company was considering investing in a diversified energy operator in the Spanish market.

Case study

Scenario planning and political intelligence in the Spanish energy market
The situation

A major pension and asset-management company was considering investing in a diversified energy operator in the Spanish market. They needed a more secure understanding of the regulatory environment, particularly its potential for change with scheduled reviews. The company also required public record checks on the company directors and intelligence on whether the Catalan separatist dispute might impact the operator’s future position in the market.
 

Our approach

Control Risks conducted public record and media searches on key individuals within the target operator. With comprehensive in-country knowledge, we produced a scenario-based political risk assessment of the Catalonia question, including how this might affect the target company and what other companies were doing to prepare. Through source enquiries, we mapped the likely regulatory direction of Spain. While most of these enquiries suggested broad continuity at the next scheduled review, all pointed to a strong potential for political change prior to the review that could threaten continuity.
 

The outcome

Equipped with our advice, the company was able to proceed with further specialist research in areas of its own technical expertise, approaching the acquisition with an awareness of nuance that otherwise would have required years of in-country operation to cultivate. After taking these steps, the company felt confident with the operator and went ahead with the deal.

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