Due Diligence Investigations

Due diligence is the discipline of finding out who somebody actually is before you sign, invest, hire, marry, partner, or trust them with access to your family or your capital. It sounds obvious. In practice, most UHNW clients I've worked with have skipped it at least once and paid for it — sometimes financially, sometimes reputationally, occasionally worse. The reason is almost always the same: the person felt right, the timing was tight, the introduction came from someone trusted, and the check that should have been run never got run.

A serious due diligence investigation is not a background check. Background checks are automated database lookups that surface prior criminal records, address history, and some public filings. They are useful, they are fast, and they miss almost every consequential risk. A due diligence investigation is a human-led, sourced, and analyzed inquiry that combines database work with public-records research, litigation review, reputational source interviews, media analysis, corporate-structure mapping, sanctions and adverse-media screening, and — where appropriate — subject-specific field work. The two products are not comparable.

In federal work I saw the value of source-based inquiry over and over. Databases tell you what's been recorded. Sources tell you what's actually true. A person can have a clean public record and a well-known pattern of behavior that ten sources in their industry would describe consistently if you knew to ask. A person can have a hit on a database that turns out to be a similarly named individual with no relation. Neither of those is visible from an automated report. We staff investigations for that reason: the analyst matters more than the database.

For UHNW families and family offices, the most common due diligence use cases are investment counterparties (fund managers, deal partners, co-investors), household and family-office hires with high access (chief of staff, estate manager, head of security, senior investment professional), significant vendors (attorneys, wealth advisors, banking relationships, security providers themselves), and personal relationships that have moved into a serious phase — marriages, adoptions, guardianships, business partnerships with new introductions. Each of those has a specific investigative profile, and each is a category where a mistake is very consequential.

The offshore and cross-border piece of this work has become more important, not less, over the last decade. Beneficial-ownership structures are more opaque, sanctions regimes are more complex, and adversarial states have gotten better at introducing themselves through legitimate-looking intermediaries. A serious diligence practice today has to combine US-side research capability with vetted overseas capability in the jurisdictions that actually matter, and it has to know how to read the corporate-structure signals that indicate the beneficial owner isn't the person on the term sheet. Not every investigation needs that depth; the ones that do, need it badly.

For families considering when to run diligence, my rule of thumb is straightforward. Any transaction, hire, or relationship where the downside of being wrong is material — financially, physically, or reputationally — is a diligence event. Almost every diligence engagement we've ever run either confirmed the client's instincts and enabled a faster decision, or surfaced something material that changed the terms or killed the deal. Both are wins. The engagements that go wrong are the ones that don't happen.