Alpha FMC - ESG

ESG and Culture Due Diligence Launch

Laura Gridley, Rob Owen, Andrew Elko, Troy Mortimer

We are pleased to announce the introduction of both ESG Due Diligence and Culture Due Diligence as part of our suite of pre-deal M&A services, helping our clients to optimize the value in their transactions.

ESG Due Diligence

ESG is currently a hot topic, with the landscape rapidly shifting and constant changes in client and regulatory demands. What was once market leading has now become market baseline and Asset Managers, Wealth Managers and Insurers are now under constant pressure to align with ESG expectations.

The objective of our new ESG Due Diligence offering is to identify any material ESG factors that may affect the long-term performance and valuation of a business and portfolio. Leveraging our team of ESG experts and industry specialists, we will provide a thorough assessment of how effectively ESG practices and processes are embedded in day-to-day activities. This will benefit our Asset Management, Wealth Management, Fintech and Insurance clients in three key ways:

  1. Identify material ESG risks that may impact future growth opportunities
  2. Review performance and trends of ESG product offerings and opportunity for growth
  3. Identify any material gaps from a reporting, monitoring or oversight perspective that require additional investment and subsequent adjustments to deal valuation.
"Identifying the key environmental, social and governance factors that influence pre-deal valuations and successful post-deal exit strategy is core to how we conduct our ESG Due Diligence services and an essential step of any M&A transaction. We leverage Alpha's 13 practices, including our dedicated ESG & Responsible Investment practice and our unparalleled industry insights to deliver pragmatic solutions to managing materially relevant opportunities and risks."
Troy Mortimer, Director, ESG & Responsible Investment

Culture DD

The degree of cultural alignment between a Buyer and a Target will have a material impact on the ease (and therefore time and cost) of integration, retention of key staff and fulfilment of the acquirer’s business plan. A review of the two cultures during the due diligence process creates transparency and clarity, providing these key benefits:

  1. Early visibility of where stresses could appear, enabling risk mitigation planning
  2. Identify organisational traits or behaviours that either party could actively seek to adopt
  3. Identify the extent to which a change in the target’s culture could impact integration success (e.g., staff retention), thereby informing critical decisions about deal viability and ringfencing
"Executives rank the ability to manage culture as more important to M&A success than financial or strategic factors, but they also acknowledge that they tend to undermanage this critical aspect, only 10 or 20 percent said they used a similar level that they apply to financials. The likelihood of meeting cost and revenue synergy targets is substantially higher if you effectively manage culture during integration, hence one of the most important things in due diligence is looking at organizational culture at an early stage."
Andrew Elko, Director, M&A

How Alpha FMC Can Help

Our strategy and M&A support bring market insights from SMEs dedicated to the sector. Whatever your reason for M&A activity, our entire team focuses on one industry helping clients diversify their product range, enter new geographies and obtain scale. We can support throughout the transaction, including vendor assistance, buy-side pre-deal diligence, taking control, post-deal integration and establishing strategies, to maximise value from the transaction. If you would like to learn more please get in touch here, or speak to one of our experts at the following contact addresses:

Rob Owen, Director (UK), M&A

Andrew Elko, Director (US), M&A


About the Authors

Laura Gridley

Laura is a Consultant at Alpha with over five years of financial services industry experience.
Prior to joining Alpha, Laura was at Holland Mountain as a specialist consultant for private capital firms to advise and deliver technology and operational transformations across front, middle and back office functions.
Her recent experience is across multiple transformation projects to achieve the global Target Operating model (middle and back office) and M&A. Currently acting as lead PMO.
Laura is an ICAEW Chartered Accountant (ACA) and holds a B.Sc. in Economics from the University of Manchester.

Rob Owen

Rob leads our deal advisory work and has supported clients on over 75 transactions. He often works on transactions which will result in a significant change to the ongoing business, either as a result of an integration and delivery of synergies or as part of a divestiture and carve out.
Most recently, Rob has worked on the following announced transactions: AllianzGI / Voya US carve-out, James Hay / Nucleus, FNZ / Under-bidder.
Prior to joining Alpha, Rob was part of the PwC Transaction Services team (6 years in London and 2 years in Hong Kong).

Andrew Elko

Andrew is a Director with Alpha North America, based in the New York Office, where he helps co-lead the North America M&A practice.
He has extensive experience across the Asset Management value chain and has worked on a number of engagements around strategy, pre-deal M&A, integration planning and post-close integration, operating models, process optimization and large-scale transformations.

Troy Mortimer

Troy is a Director at Alpha in ESG and Responsible Investment practice with over 20 years experience. Prior to joining Alpha, Troy led the KPMG UK Sustainability and Responsible Investment practice. Troy has worked across all aspects of the asset management and wealth management industries covering both traditional and alternative asset classes including PE, RE and infrastructure assets. He specializes in supporting asset managers and asset owners develop and integrate environmental, social and governance (ESG) practices across all aspects of their operating model, adhere to local and international sustainable finance regulation/frameworks and support on ESG-related due diligence reviews.