This is the research performed by an investor on a potential investment, in order to determine its merits and uncover potential risks. The due diligence process should uncover the strengths and weaknesses that could potentially affect performance. The key areas that are typically analysed include the past performance and the factors that drove it, the team members and their experience, the strategy, how ideas are generated and diligence, how positions are sized and traded, and risk management. A separate part of the due diligence process is operational due diligence which analyses the management firm’s operational procedures and compliance/regulatory adherence.