Deal Sourcing: find out what it is and how to manage it

Deal Sourcing is the process of actively and passively searching for deals, usually by a [private equity] fund (/en/blog/quest-ce-que-le-private-equity-pe). Through this process, the fund can discover and select suitable investment opportunities. Deal Sourcing offers investors a broader and more varied base of investment opportunities, enabling them to find high-potential, profitable opportunities.

Deal Sourcing is carried out in a systematic and strategic way. Sourcing can be proactive or reactive.
Proactive sourcing involves the identification and exploration of investment opportunities by a research team. This process may involve taking into account existing relationships and exploring sectors and companies.
Reactive sourcing aims to explore companies that have not contacted the fund but meet its investment criteria.

Deal Sourcing is a multi-stage process. It begins with an in-depth market analysis. This involves examining sectoral and macro-economic trends. Next, an investor will carry out a feasibility analysis of opportunities and companies. He or she will assess the growth prospects and financial fundamentals of the target companies.

Once the investor understands the prospects of the companies, he or she moves on to the [due diligence] stage(/en/blog/comprendre-la-due-diligence). This stage involves gathering detailed information on companies and evaluating their investment.

Deal sourcing is a key element of private equity investment. It enables investors to find and explore profitable investment opportunities.