Cromwell has a step-by-step acquisition strategy which follows the basic model illustrated below.
In most instances, Cromwell aims to deal predominately off-market, in order to obtain more favourable pricing, and provide sufficient time to negotiate and conduct full due diligence.
All potential property acquisitions are reviewed according to the Investment Policy of the Fund, against objective investment criteria and market indicators and modelled to determine whether they are expected to exceed threshold IRRs and yields.
Qualifying potential property acquisitions are subject to initial technical, financial and legal due diligence by the acquisition team, which includes two executive directors. The results of initial due diligence investigations are factored into models and the revised models are reviewed.
A due diligence committee appointed by the Board, which includes a number of Directors will review the initial information. Contract negotiations with the vendor are normally completed to heads of agreement stage before proceeding any further.
Comprehensive external technical, financial and legal due diligence investigations are undertaken and their results are factored into revised models. External advisors are utilised extensively as part of this process.
A commitment is sourced by a financier for the provision of any debt required to complete the acquisition. The models and reports are reviewed by the Investment Committee at the time finance approval is required.
In the event that the Board is satisfied with the results of the modelling, due diligence reports and valuation, and has secured any debt required for the acquisition, it may elect to proceed with an investment.
