Deal flow refers to the rate at which investments are being made. Deal flow is a general indicator of business activity, market interest in the product (in this case, alternative investments) and the general ability of the supplier of the product (the investment platform) to sell its product.
This can be difficult to identify in the case of the alternative investment platform for a variety of reasons. Sometimes sites will list overall return figures on its homepage; sometimes these sites do so in a way that is clear as to what time period it is referring and whether the return figure is comprehensive of each fund, other times it is not. Some platforms are nascent enough to the point where they don’t provide a history of deal flow. In certain cases the fund lists a target investment amount for a particular fund and one can view the percentage of fundraising towards this target. However, even though there are general numbers provided in this case, it is important to perform due diligence on any information provided relevant to any investors involved as well as the recency of deal flow that might provide insight into the legitimacy of such funds.
With the knowledge that some alternative investing platforms are able to capitalize on a wave of investments in initial funds but are unable to sustain performance in subsequent funds – as with any market indicator – recent deal flow quality and quantity is telling in terms of the current state of the investment firm (this is true of investment bankers, venture capitalists, or alternative investment platforms). In analyzing such platforms, it is important to dig up information from the website but also scour the internet for more information if the website does not provide fully sufficient detail.
