A due diligence questionnaire (DDQ) is the standardized document LPs use to evaluate whether a fund meets their investment and operational criteria. It covers everything: investment strategy, track record, team background, fund terms, compliance infrastructure, IT security, business continuity, valuation methodology, and ESG practices. Institutional LPs (pensions, endowments, fund-of-funds) almost always require a completed DDQ before they will advance a manager past the initial screening stage in any investor outreach process.
DDQs come in various formats. The Institutional Limited Partners Association (ILPA) publishes widely used templates that have become something of a de facto standard. Many LPs also send their own proprietary questionnaires on top of the ILPA template, which means a single fundraise can involve completing multiple versions of what is essentially the same document with different formatting. This is tedious but unavoidable. Having a well-maintained master DDQ that you can adapt to different formats will save significant time across the fundraise.
For emerging managers, the DDQ is often where the fundraise gets real. It is easy to have a compelling pitch deck and a polished thirty-minute meeting. It is much harder to have clean, detailed, and defensible answers to 150 questions about your back-office operations, your compliance manual, your cybersecurity protocols, and your key-person risk mitigation plan. Institutional allocators use the DDQ to identify gaps in operational maturity, and those gaps kill more emerging manager allocations than poor performance does. The operational due diligence (ODD) component, separate from the investment due diligence, has become its own discipline, and many LPs have dedicated ODD teams. Working with experienced capital raising services can help emerging managers prepare for this level of scrutiny.
The practical advice: do not wait for your first LP to send a DDQ before you start writing one. Build your master DDQ as part of your fund formation process, right alongside your PPM and LPA. Completing it forces you to confront operational questions you might otherwise defer, and having it ready to send within 24 hours of an LP request signals preparedness that most first-time managers cannot match.
Frequently Asked Questions
What is included in a due diligence questionnaire?
A DDQ typically covers investment strategy, track record, team backgrounds, fund terms, compliance infrastructure, IT security, business continuity, valuation methodology, and ESG practices. The ILPA template is the most widely used format, and most institutional LPs send proprietary questionnaires on top of it.
How long is a typical DDQ?
Most institutional DDQs run 100-200 questions. The ILPA standard template is on the shorter end, but many LPs layer on proprietary operational and ESG sections that push the total well past 150 questions. Expect to maintain a master DDQ of 200+ answers that you adapt per LP.
Who sends the DDQ, the GP or the LP?
The LP sends the DDQ to the GP. It is the LP's evaluation tool, not a GP marketing document. That said, smart GPs build a master DDQ proactively during fund formation so they can return a completed version within 24 hours of receiving the request.
