Published 6 October 2026 | By FJP Investment Editorial Team

A good investment presentation tells you why an opportunity might work.

Due diligence asks a different question:

What evidence do I have that the story being presented is actually supported by the facts?

This is particularly important in private investments.

A listed company may have years of public filings, institutional analysts, market pricing and extensive third-party coverage.

A private company raising capital may have far less information in the public domain.

The investor therefore needs to do more work.

That does not mean trying to eliminate every possible risk. No amount of due diligence can guarantee that a business will succeed or that an investor will receive their capital back.

The objective of investment due diligence is much more practical: understand what you are investing in, verify the important information where possible, identify the material risks and decide whether the proposed return justifies those risks.

For experienced investors considering private debt, loan notes, bonds, property finance, growth capital and other alternative investments, this process should take place before capital is committed rather than after something has gone wrong.

Important: This article is provided for general educational purposes only. It does not constitute investment, legal or tax advice or an invitation or recommendation to invest. Private and alternative investments can be high risk, illiquid and unregulated and investors can lose some or all of their capital.

What is investment due diligence?

Investment due diligence is the process of investigating an opportunity before deciding whether to invest.

The precise work depends on the investment.

Due diligence on a property-development loan might focus heavily on:

• land ownership;
• planning permission;
• construction costs;
• development valuations;
• senior debt;
• security; and
• expected property sales.

Due diligence on a growth company might instead concentrate on:

• revenue;
• customers;
• management;
• intellectual property;
• cash burn;
• competitive position;
• valuation; and
• the eventual exit strategy.

There is therefore no universal folder of documents that proves an investment is good.

Due diligence needs to reflect the actual risks of the opportunity.

Start by understanding exactly what you are buying

Before investigating the company, establish the investment itself.

Are you acquiring:

• ordinary shares;
• preference shares;
• a loan note;
• a bond;
• a secured debt instrument;
• an interest in a fund;
• a direct interest in property;
• an interest in a special-purpose vehicle; or
• something else?

This sounds obvious, but the distinction determines your legal and economic position.

If you buy equity, you own part of a company.

If you subscribe to a loan note, you are normally a creditor of the issuer.

If you invest in a company that owns property, you do not necessarily own the property yourself.

If you provide debt to a development company, you may be relying on security rather than owning the development.

The first due-diligence question should therefore be:

What legal right do I receive in exchange for my money?

1. Verify the legal entity

Identify exactly which company or entity is receiving the investment.

A group may trade under a well-known brand while containing numerous separate legal entities.

Those entities can include:

• a parent company;
• operating businesses;
• property-owning companies;
• special-purpose vehicles;
• finance companies; and
• the company actually issuing the investment.

The distinction matters.

If the investment contract is with Company A, investors do not automatically acquire rights over every asset owned by Companies B, C and D simply because they belong to the same group.

For UK companies, Companies House is an obvious starting point.

The public register can provide information including:

• date of incorporation;
• registered office;
• current and former directors;
• people with significant control;
• annual accounts;
• confirmation statements;
• previous company names;
• registered charges; and
• certain insolvency information.

You can access the official service through Companies House company information.

Companies House is a starting point, not a quality certificate

A company appearing on Companies House does not mean the government has approved its business model or investment proposition.

Companies House is a corporate registry.

Its information can be extremely useful for comparing what an investment presentation says with what the company’s public record says.

But registration should never be presented as evidence that an investment has been vetted or endorsed by the government.

This distinction remains important even after the significant corporate-transparency reforms introduced in recent years.

Identity verification has strengthened the Companies House regime

Since 18 November 2025, compulsory identity-verification requirements have been introduced for directors and people with significant control under the Economic Crime and Corporate Transparency Act reforms.

In 2026, Companies House continues the transition to this new regime.

That is a meaningful improvement in corporate transparency.

But a verified identity does not tell an investor whether:

• the business is profitable;
• its forecasts are achievable;
• its assets are correctly valued;
• its debt can be repaid; or
• the investment is suitable.

Identity verification helps establish who somebody is.

Investment due diligence still needs to establish what their business is capable of doing.

2. Investigate the people behind the business

Private investment is often as much about people as assets.

Look at the directors, founders and senior management.

Questions can include:

• How long have they worked in the sector?
• What businesses have they previously run?
• Have those companies succeeded?
• Have previous companies entered insolvency?
• Have they previously raised investor capital?
• What happened to those investments?
• Are their stated qualifications and experience verifiable?
• Are there material legal disputes?
• How much capital have the principals invested themselves?

A previous business failure should not automatically disqualify somebody.

Plenty of successful entrepreneurs have experienced failed ventures.

What matters is understanding the circumstances rather than discovering them later.

Look at changes as well as the current position

A static Companies House snapshot only tells part of the story.

Look at the history.

For example:

• Have several directors resigned recently?
• Has the registered office repeatedly changed?
• Has the company changed its name several times?
• Have new charges recently been registered?
• Have accounts been filed late?
• Has ownership changed?
• Has the company significantly altered its stated activities?

None of these automatically means there is a problem.

But material changes deserve explanation.

3. Check the regulatory position

Never assume that a company is FCA regulated because its website mentions investments, finance or property.

Likewise, do not assume that every party in an investment needs FCA authorisation.

The regulatory position depends on the activity being carried out.

The FCA provides a Firm Checker and the Financial Services Register so investors can establish whether a firm is authorised or registered and what permissions it holds.

This matters because a firm can be FCA authorised for one activity without having permission to carry out another.

Investors should therefore ask:

• Is the issuer regulated?
• Is the investment itself regulated?
• Is the firm introducing or promoting it regulated?
• What activity is each party actually carrying out?
• What FCA permissions exist?
• What protection applies if something goes wrong?

Regulated company does not necessarily mean regulated investment

This distinction is frequently misunderstood.

A regulated firm might be involved somewhere in a transaction without the underlying private investment itself receiving the protections associated with a mainstream regulated product.

Similarly, a regulated professional may provide a particular service to an unregulated company.

That does not magically convert the whole investment into an FCA-regulated investment.

Look at the specific activity and product rather than simply spotting an FCA number somewhere in the documentation.

Check the FCA Warning List as well

The FCA maintains a warning list containing firms and individuals it knows may be operating without the required authorisation.

This can be checked through the FCA Warning List.

Absence from the list does not prove that an opportunity is safe.

But appearing on it would obviously require serious attention.

4. Understand how the business makes money

This is one of the best ways to cut through complicated presentations.

Ask somebody to explain the business in plain English.

For example:

What does the company sell?

Who pays it?

How much profit does it make?

Why does it need investors’ money?

If the economic model cannot be explained clearly, adding another fifty pages of presentation material rarely fixes the problem.

5. Understand exactly what investors’ money will be used for

The phrase growth capital can cover almost anything.

Try to establish where the money actually goes.

It might be used for:

• buying land;
• construction;
• acquisitions;
• working capital;
• staff;
• marketing;
• equipment;
• refinancing existing debt;
• repaying another creditor; or
• meeting existing operating losses.

Different uses create different risks.

An investor should understand whether their capital is:

creating something new, acquiring an asset, replacing existing financing or simply keeping the business running.

6. Examine the financial information

Depending on the company, investors may have access to:

• statutory accounts;
• audited accounts;
• management accounts;
• cash-flow statements;
• budgets;
• forecasts;
• bank statements;
• debtor information;
• creditor schedules; and
• other financial records.

Historical accounts tell you what has happened.

Forecasts tell you what management believes may happen.

Do not confuse the two.

A business projecting £10 million of profit three years from now has not earned £10 million of profit.

Revenue is not cash

This sounds basic, but it matters enormously when analysing debt.

A company can report substantial revenue and still experience cash-flow problems.

Customers may pay slowly.

Inventory may absorb working capital.

Large capital expenditure may be required.

Interest may consume operating cash.

For debt investors, the ability to generate cash can be considerably more important than the headline revenue figure.

7. Understand the existing debt

An investor rarely arrives in an empty capital structure.

The company may already owe money to:

• banks;
• specialist lenders;
• shareholders;
• other bondholders;
• loan-note investors;
• suppliers;
• tax authorities; and
• other creditors.

Ask:

• How much debt already exists?
• When does it mature?
• What interest rate does it carry?
• What security supports it?
• What ranking does it have?
• Is any debt overdue?
• Will the new investment refinance existing debt?

This can radically change the risk profile.

8. Examine the security

If an investment is described as secured or asset backed, verify what that actually means.

Questions should include:

• What asset provides the security?
• Who owns it?
• What is its present value?
• Who valued it?
• How much debt is already secured against it?
• Where does the new investment rank?
• Has the legal charge been registered?
• Who holds the security for investors?
• How would enforcement work?

Our detailed guide to asset-backed investments and security examines first charges, second-ranking debt, valuations, LTV, security trustees and enforcement in more detail.

9. Verify important assets independently

If a property is central to the investment case, establish whether it actually belongs to the entity that is supposed to own it.

For registered land in England and Wales, HM Land Registry can provide:

• the title register;
• registered ownership;
• certain rights and restrictions;
• registered mortgages; and
• other charges.

The official HM Land Registry service allows copies of the register and title plan to be obtained.

This does not answer every property question.

But it is considerably better than accepting a photograph of a building as evidence that it forms part of the investor security.

10. Examine valuations critically

A valuation is an opinion, not cash sitting in a bank account.

Find out:

• who instructed the valuation;
• who prepared it;
• when it was prepared;
• the professional qualifications of the valuer;
• the valuation basis;
• what assumptions were made;
• whether planning is assumed;
• whether development completion is assumed; and
• whether the valuation represents current or future value.

A development worth £30 million when fully completed may be worth substantially less today.

The difference becomes particularly important if the investment fails before completion.

11. Identify where the proposed return actually comes from

A fixed return written into a contract is not the source of the return.

The business is.

If a company is raising £20 million at a 10% annual coupon, it needs to find £2 million of annual cash just to service the interest before dealing with repayment of the original capital.

Ask:

• Does the company already generate enough cash?
• Does it depend on future growth?
• Will property sales fund the return?
• Does it need refinancing?
• Is interest being paid from newly raised capital?
• How sensitive is the model to delays or lower revenue?

Our guide to fixed-return investments examines this in more detail.

12. Understand how the capital itself will be repaid

Interest and capital are two separate obligations.

A company might comfortably pay interest for three years while still struggling when £20 million becomes repayable on one date.

The maturity strategy might rely on:

• operating cash;
• property sales;
• asset disposal;
• a business sale;
• institutional refinancing;
• bank financing; or
• another private capital raise.

Each strategy has risks.

Ask:

What needs to be true at maturity for investors to receive their money back?

13. Build the downside scenario

This is where good due diligence becomes particularly useful.

Investment presentations naturally describe the successful scenario.

Create your own unsuccessful one.

For example:

• What if revenue is 30% below forecast?
• What if construction is twelve months late?
• What if development costs increase?
• What if property prices fall?
• What if a major customer leaves?
• What if refinancing cannot be obtained?
• What if the company cannot pay the next coupon?
• What if the secured asset has to be sold quickly?

Then ask what happens to the investor in each scenario.

The purpose is not to predict disaster.

It is to understand resilience.

14. Understand liquidity before investing

Many private investments have no active secondary market.

An investor may have a contractual right to transfer an investment while having nobody willing to buy it.

If the term is five years, treat the capital as potentially unavailable for five years.

And if a borrower gets into difficulty, recovery can take longer.

The FCA’s current guidance on high-risk investments specifically warns that these investments can be substantially less liquid than mainstream investments and that investors can lose all the money invested.

15. Read the legal documents

The brochure explains the investment.

The contract governs it.

Depending on the structure, investors may receive documents such as:

• an investment memorandum;
• subscription agreement;
• loan-note instrument;
• bond instrument;
• shareholders’ agreement;
• security trust deed;
• debenture;
• intercreditor agreement;
• property charge;
• terms and conditions; and
• risk disclosures.

Look particularly at:

• events of default;
• maturity;
• interest;
• extensions;
• voting rights;
• security enforcement;
• transfer restrictions;
• governing law;
• issuer rights; and
• investor rights.

If the legal documentation says something materially different from the presentation, the legal document deserves attention.

16. Check who controls investor money

Understand where your subscription funds go.

Ask:

• Which bank account receives the money?
• Whose account is it?
• Does the issuer receive funds directly?
• Is an escrow or client-money arrangement involved?
• What conditions have to be satisfied before money is released?
• Who has authority over the account?

An investor should know the path their money takes from their bank account into the underlying investment.

17. Understand every party’s role

Private investment structures can involve numerous organisations.

For example:

• issuer;
• borrower;
• investment introducer;
• security trustee;
• lawyers;
• accountants;
• valuer;
• property manager;
• administrator; and
• other professional advisers.

Do not assume one party is responsible for another party’s work.

Know exactly what each organisation does and does not do.

This is particularly important where an introducer connects an investor with a third-party opportunity but does not manage the underlying company or investor capital.

18. Look for conflicts of interest

Ask who is related to whom.

For example:

• Is the valuer genuinely independent?
• Does the borrower control the security trustee?
• Is the property being purchased from a related company?
• Do directors own companies supplying services to the project?
• Are management fees being paid to related parties?
• Does the person recommending an asset benefit from the transaction?

A conflict does not automatically mean a transaction is inappropriate.

But conflicts should be identified and understood.

19. International investors have additional due diligence

An investor in Hong Kong, Singapore, Dubai, Qatar, Oman, Bermuda or the Bahamas has the same underlying investment questions as somebody sitting in London.

But cross-border investing adds another layer.

Consider:

• which country’s law governs the investment;
• how investor rights would be enforced;
• whether the investment can lawfully be promoted in your jurisdiction;
• tax treatment;
• double-taxation agreements;
• withholding tax;
• currency exposure;
• international bank transfers;
• source-of-funds requirements; and
• whether independent local advice is required.

Distance should increase the standard of verification.

It should not reduce it.

20. Watch for common warning signs

No single warning sign proves an investment is fraudulent or destined to fail.

But combinations of warning signs should prompt further investigation.

Examples can include:

• pressure to invest quickly;
• claims that returns are guaranteed;
• very high returns described as low risk;
• reluctance to identify the legal issuer;
• unclear use of funds;
• missing or inconsistent financial information;
• directors whose claimed history cannot be verified;
• security that cannot be clearly identified;
• valuations based largely on future assumptions;
• heavy reliance on new investors to meet existing obligations;
• difficulty obtaining legal documents;
• unexplained related-party transactions;
• complex structures nobody can explain simply; and
• an unwillingness to discuss what could go wrong.

The FCA’s current warning on unregulated loan notes and mini-bonds makes the same fundamental point: high fixed returns can involve substantial risk, and investors can lose all their capital if the issuer fails.

Due diligence does not mean believing nothing

There is another extreme worth avoiding.

An investor could theoretically investigate forever.

No company can prove what its revenue will be in 2029.

No valuer can guarantee a property’s future price.

No lawyer can guarantee a borrower will honour a contract.

No due-diligence process can remove commercial uncertainty.

The objective is therefore not absolute certainty.

It is informed uncertainty.

You want to know:

What are the important assumptions, what evidence supports them and what happens if they prove wrong?

Do not confuse quantity of documents with quality of due diligence

A data room containing 3,000 pages can look impressive.

It can also conceal the fact that one fundamental question remains unanswered.

Good due diligence is not measured by file size.

It is measured by whether the information allows you to understand:

• the investment;
• the business;
• the people;
• the finances;
• the assets;
• the liabilities;
• the repayment mechanism;
• the legal rights;
• the regulatory position; and
• the downside.

Independent verification matters

Where a particular fact is fundamental to an investment, consider whether it can be independently verified.

Examples include:

• Companies House records;
• HM Land Registry;
• local authority planning portals;
• the FCA Register;
• independent valuations;
• audited accounts;
• legal opinions;
• professional reports;
• contractual documentation; and
• independent professional advice.

The more important the claim is to the investment case, the stronger the case for independent evidence.

Due diligence and diversification solve different problems

An investor can carry out excellent due diligence and still lose money.

A fundamentally sound company can be affected by events nobody predicted.

This is why investment concentration matters.

Due diligence attempts to improve the quality of each individual decision.

Diversification attempts to reduce the damage caused when an individual decision goes wrong.

They complement one another.

How FJP Investment approaches opportunities

FJP Investment has operated within the alternative investment market since 2013.

We consider opportunities across areas including private debt, loan notes, bonds, property and development finance, growth capital and other specialist investment structures.

FJP Investment acts as an introducer.

We do not manage investors’ money and do not provide personalised investment, legal or tax advice.

Before deciding whether an opportunity is one we are prepared to introduce, areas we seek to understand can include:

• the people behind the business;
• corporate structure;
• financial information;
• use of investor funds;
• existing debt;
• underlying assets;
• security where applicable;
• valuations;
• investment documentation;
• commercial assumptions; and
• the intended mechanism for paying returns and repaying investors.

That process does not make an investment safe and does not replace an investor’s own due diligence or independent professional advice.

Investment risk remains with the underlying opportunity.

Our guide to UK alternative investments for international investors looks more broadly at the market, while our How We Work page explains FJP Investment’s role in the introduction process.

A practical private investment due-diligence checklist

Before committing capital, an investor should ideally be able to answer:

• What exactly am I buying?
• Which legal entity am I investing into?
• Who controls that entity?
• What does the underlying business actually do?
• What will my capital be used for?
• What does the company’s financial position look like?
• How much existing debt does it have?
• Where does my investment rank?
• What security exists?
• Who owns the secured assets?
• How have those assets been valued?
• Where does my investment return come from?
• How will my capital be repaid?
• What happens if the business underperforms?
• Can I access my money early?
• What regulatory protections exist?
• What do the legal documents actually say?
• Who controls investor money?
• What conflicts of interest exist?
• What tax and currency issues apply?
• What independent information have I checked?
• What is the realistic worst-case outcome?

If an investor cannot answer those questions, the next step should probably be more investigation rather than an investment transfer.

Frequently asked questions

What is investment due diligence?

Investment due diligence is the process of investigating an opportunity before investing, including the company, management, finances, assets, liabilities, security, legal documentation, regulatory position and risks.

Does due diligence guarantee an investment is safe?

No. Due diligence can help identify and understand risks but cannot guarantee future performance or repayment.

How do I check a UK company?

The Companies House public register provides information about UK companies including officers, filings, accounts, people with significant control, charges and certain insolvency information.

Does being registered at Companies House mean a company has been approved?

No. Companies House registration confirms the existence and filing status of the legal entity. It is not government approval of the company’s investment proposition or financial strength.

How can I check whether an investment firm is FCA authorised?

The FCA Firm Checker and Financial Services Register can be used to check whether firms are authorised or registered and what permissions they hold.

Does FCA authorisation guarantee an investment?

No. Authorisation does not guarantee investment performance, and the regulatory status of a firm does not necessarily determine the protection applicable to every investment it is associated with.

How can I check property offered as security?

For registered property in England and Wales, HM Land Registry can provide title information showing ownership and registered charges. Specialist legal and valuation advice may also be necessary.

What is the most important due-diligence question?

There is no single question, but for debt investments two of the most important are where the return comes from and how the original capital will eventually be repaid.

Who should carry out investment due diligence?

Investors should carry out their own assessment and may also use independent lawyers, accountants, surveyors, tax advisers and other professionals depending on the investment.

Does FJP Investment carry out due diligence?

FJP Investment reviews opportunities before deciding whether they are ones we are prepared to introduce and seeks to understand material areas of the business and investment structure. This does not eliminate investment risk, constitute a recommendation or replace investors’ own due diligence and independent professional advice.

Final thoughts

Due diligence is not about finding enough information to convince yourself to invest.

It is about trying to understand the opportunity well enough that both the positive case and the negative case make sense.

The investment presentation tells you how money might be made.

The financial statements tell you where the business has been.

The legal documents tell you what rights you actually have.

The security documents tell you what happens if repayment fails.

And the downside analysis tells you how much you could lose if the assumptions prove wrong.

Jamie Johnson, CEO of FJP Investment, comments: “I don’t think due diligence is about building the biggest folder of documents. You can have thousands of pages and still miss the point. I want to understand who we’re dealing with, what they’re doing with the money, what supports the investment and how investors are supposed to get paid back. Then you start testing whether the evidence actually backs that story up.”

That is ultimately what good investment due diligence should achieve.

Not certainty.

Understanding.

FJP Investment works with qualifying high-net-worth and sophisticated investors in the UK and internationally. If you meet the relevant investor criteria and would like to receive information about alternative investment opportunities currently being introduced by FJP Investment, you can register below.

Capital is at risk. Private and alternative investments can be unregulated, complex, illiquid and/or non-transferable and investors may lose some or all of their capital. Due diligence does not guarantee investment performance or repayment. Where an investment is unregulated, investors may not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme. FJP Investment acts as an introducer and does not provide personalised investment, legal or tax advice. Investors should conduct their own due diligence and obtain independent professional advice where appropriate.