Glossary · Fundraising

What is a DDQ?

A due diligence questionnaire, or DDQ, is the standard list of questions investors send a manager to assess its team, process, controls and compliance.

In practice

Most DDQs arrive after an LP’s initial interest, alongside the PPM and before onsite meetings. Content ranges from investment strategy and track record to valuation, cybersecurity, ESG and business continuity. Managers typically keep a master answer set and tailor it per investor. ILPA publishes a standard template. A DDQ is separate from the AML and KYC onboarding forms completed at subscription.

An example

Round numbers, not a real fund

Say a pension plan is considering a fund. Before any meeting it sends a DDQ of 200 questions, and the manager’s team answers them in writing.

Why it matters

Answering one is a large part of a manager’s fundraising work, and the answers are kept for the life of the investment.

A definition, not advice; where usage varies the entry says so. Something wrong? Tell the desk.

Related terms

PPMA private placement memorandum, or PPM, is the offering document that tells prospective investors about a fund’s strategy, terms, risks and manager.
ILPAILPA is the Institutional Limited Partners Association, an industry body of investors that publishes best-practice principles on fund terms, fee reporting and governance.
Limited partnerA limited partner, or LP, is an investor in a fund. It supplies most of the capital, takes no part in running it, and typically risks only its commitment.
AML and KYCAML rules aim to stop money laundering. KYC, know your customer, is the checking of who an investor is and where its money comes from before a fund accepts it.
First closeA first close is the first time a fund accepts investors’ commitments and gets going, even though it keeps raising money toward its full target.

The terms, in the news each morning.

FundOps Daily carries the day’s fund closes, deals and moves across private markets. Free, seven days a week.