Which document typically accompanies an investment decision and includes valuation, due diligence findings, financing plan, exit strategy, risk mitigation?

• A. Investment memo includes rationale for investment, valuation, due diligence findings, financing plan, exit strategy, and risk mitigation.
• B. A product brochure.
• C. A training manual.
• D. A press release.

Answer: (A)

In private equity, the document that accompanies an investment decision is the investment memo. This decision-ready memo consolidates everything the team needs to justify the deal: the investment thesis and why it fits the portfolio, the chosen valuation approach and key numbers, a summary of due diligence findings, the proposed financing plan and capital structure, the intended exit strategy, and the risk factors with corresponding mitigations. It provides a clear, concise, and auditable view of how the investment will create value, how it will be financed, how and when returns will be realized, and how risks will be managed, which is exactly what the investment committee uses to decide whether to approve the deal. Marketing materials like product brochures, training manuals, or press releases are not the decision package for this purpose; they serve different functions such as promoting a product, training staff, or announcing news.