Definition
What the ILPA DDQ is.
The ILPA Due Diligence Questionnaire is a standard set of questions that institutional investors (limited partners, or LPs) ask private fund managers (general partners, or GPs) before committing to a fund. It is published by the Institutional Limited Partners Association, the industry body for LPs, and is free to download from ILPA's website.
ILPA built it to cut a real cost. Before it existed, every LP, consultant and placement agent sent its own long, custom DDQ, and GPs answered the same questions in dozens of different layouts. The ILPA DDQ standardizes the most common and important questions so a GP can answer once and reuse the work, while LPs still send their own follow-up questions separately.
Its history, per ILPA:
- 2013: first version released.
- 2016: updated alongside the ILPA Reporting Template, with the PRI's LP responsible investment DDQ adopted as the ESG section.
- 2018: a section on diversity, equity and inclusion added, with the first Diversity Metrics Template.
- November 2021: ILPA DDQ 2.0, the current version, released after a public comment period, with a separate user guide and an updated Diversity Metrics Template.
ILPA is clear that the DDQ is not mandatory, and that it was written with private equity funds as the reference point. Real estate, private credit, venture and infrastructure managers often receive it anyway, adapted.
Contents
What the ILPA DDQ 2.0 covers.
The questionnaire is organized into 20 topics. Each mixes short Yes/No questions, which give the LP a quick read, with longer questions that ask for detail. The third column is where a GP usually finds the answer already written down.
| Topic | What it asks about | Where the answers usually live |
|---|---|---|
| 1. Firm: General Information | Ownership, organization, offices, headcount, budget | Entity and ownership charts, org chart, firm budget |
| 2. Fund: General Information | Fund structure, size, target close, fund budget | PPM, fund legal and tax structure chart |
| 3. Succession Planning / Key Persons | Key person provisions, succession, departures | LPA key person clause, succession plan |
| 4. Investment Strategy | Strategy, sectors, geographies, deal types, changes from prior funds | PPM strategy section, IC memos |
| 5. Co-Investments | How co-investment is offered and allocated | Co-investment and allocation policy |
| 6. GP-Led Secondaries / Continuation Funds | Past and planned GP-led transactions and their process | Transaction records, LPAC materials |
| 7. Credit Facilities | Use of subscription and NAV facilities, terms, impact on returns | Facility agreements, LPA provisions |
| 8. Investment Process | Sourcing, diligence, approval, investment committee | Investment process manual, IC charter, sample IC memo |
| 9. Team | Leadership and investment professionals, turnover, compensation, time allocation | Team bios, HR records, compensation policy |
| 10. Alignment of Interests | GP commitment, carry allocation, fee offsets | LPA economics, carry plan |
| 11. Market Environment | Competitive landscape and pipeline | Market view, pipeline of opportunities |
| 12. Fund Terms | Key terms, changes from predecessor funds, waterfall, preferred return | Term sheet, LPA, waterfall example |
| 13. Firm Governance / Risk / Compliance | Regulatory status, compliance program, conflicts, litigation | Compliance manual, Form ADV, conflicts policy |
| 14. Track Record | Predecessor fund performance, benchmarks, realizations | Track record workbook, fund reports |
| 15. Accounting / Valuation | Valuation policy, auditors, administrator, fund accounting | Valuation policy, audited financials, administrator agreement |
| 16. Reporting | What LPs receive and when, reporting template use | Sample quarterly report, reporting calendar |
| 17. Legal | Fund counsel, side letters, MFN, regulatory matters | LPA, side letter summary |
| 18. Data Security / Technology / Third-Party(s) | Cybersecurity program, technology tools, key service providers | Information security policy, incident response plan, vendor list |
| 19. ESG | Responsible investment policy and practice, drawn from the PRI LP DDQ | ESG policy, PRI reporting, portfolio ESG data |
| 20. Diversity, Equity and Inclusion | DEI policy and practice at the firm and portfolio, metrics | DEI policy, ILPA Diversity Metrics Template |
Behind the questionnaire sit eight appendices. Appendix A lists 89 requested documents, from the ownership chart and fund budget to valuation and compliance policies, and ILPA asks that data be provided in spreadsheet format where it applies. Appendices B through H are templates for team members, references, third parties and technology tools, fund data, portfolio investments, GP-led secondaries, and credit facilities.
Answering
How GPs answer it well.
ILPA's own user guide answers most of the practical questions. The short version:
- Answer only what applies, and say why when you skip. ILPA expects not every question to fit every fund. Leave a Yes/No box blank if it does not apply, and add a brief explanation for any skipped detailed question.
- Scope "the Firm" to what matters. For multi-strategy managers, answers about the Firm should focus on the business units materially related to the fund being raised, with a short overview of the rest and a stated rationale.
- Sensitive answers can be deferred, not dodged. A GP need not disclose information that would breach an NDA, and may offer certain answers in person, redacted, or later in diligence, as long as it explains why.
- Keep extra questions out of the standard document. ILPA asks LPs to send supplementary questions as a separate list, which lets a GP keep one clean, reusable ILPA response.
- Reuse, then refresh. Most of the answers already exist in the PPM, LPA, compliance manual, valuation policy and the last fundraise's DDQ. The work is pulling the current version of each passage, not writing from scratch, and updating what changed since the predecessor fund.
Tooling
Where Mattercite fits.
Mattercite answers a DDQ from the documents already in the data room. Upload the PPM, LPA, policies and prior DDQs, import the ILPA DDQ (or an LP's custom version) as it arrived in Excel, Word or PDF, and review a draft answer for each question with a citation to the file and page it came from. Questions the documents do not cover are marked Needs Information instead of guessed, which matters when an LP will hold you to the answer. There is no answer library to build first. More on the DDQ page.
Questions
Common questions.
Is the ILPA DDQ free to use?
Yes. ILPA publishes the DDQ 2.0, its user guide and the Diversity Metrics Template on its website for any market participant to download and use.
Is the ILPA DDQ required?
No. ILPA describes it as a standard to reduce duplicated work, not a required document. Many LPs send it as is, others adapt it, and most add their own follow-up questions in a separate list.
What is the latest version of the ILPA DDQ?
ILPA DDQ 2.0, released in November 2021, is the current version. It replaced version 1.2 from 2018 and is supported by a separate user guide and an updated Diversity Metrics Template.
How is an ILPA DDQ different from a vendor DDQ?
An ILPA DDQ is sent by investors to a fund manager before committing capital and covers strategy, team, track record, terms, governance, ESG and DEI. A vendor DDQ is sent by a customer to a supplier before signing and covers security, privacy, finances and operations. Both are due diligence questionnaires; Mattercite answers both from source documents.