Private equity investors are taking heed of the significant corruption risks posed by their investments, but getting their arms around those risks and the targets’ compliance programs can be challenging. In this second installment of our article series on managing corruption risk in portfolio companies, we discuss key components of pre-deal assessment and diligence, when to walk away from a deal and when it may make sense to invest in companies that have had FCPA problems. The first article addressed the compliance and enforcement climate and the risks a private equity firm faces related to its portfolio companies. A subsequent article will examine how to walk the line between control and passivity while monitoring the portfolio, and strategies for handling anti-corruption issues that arise after the deal has closed. See our three-part series on managing M&A anti-corruption risk: “Pre-Deal Prep” (Oct. 3, 2018); “Pre-Closing Risk Assessments and Due Diligence” (Oct. 17, 2018); and “Deal Terms and Integration” (Oct. 31, 2018).