* Document released this month
* Designed to streamline fund due diligence
* Lets GPs focus on how they’re different
Since posting a draft due diligence questionnaire on its website for comment in April, ILPA has counted some 3,000 downloads, according to Michael Elio, managing director-industry affairs. At least 500 of those have come since early November when it released Version 1.0 of the questionnaire, a revision reflecting hundreds of comments. Elio said he’s already received e-mails from members saying they’ve gotten their first ILPA due diligence questionnaires filled out by general partners.
Should the questionnaire catch on, GPs may well be thankful. An executive at a large GP told Elio at the association’s GP Summit in early November that his firm received at least 100 different due diligence questionnaires to fill out during its latest fund-raise. Let’s say 30 or so of them standardize on the ILPA due diligence questionnaire, said Elio. “The value add right there is, I’ve wiped out a third of their work.”
For LPs, the due diligence questionnaire ensures they’re getting the basic information they need to make an informed decision—particularly valuable for investors new to the asset class.
To construct its due diligence questionnaire, the association gathered more than a dozen sample questionnaires from LPs, GPs and others. The questions cover 13 major areas, including investment strategy, investment process and fund terms. It starts with more than 60 yes-no questions in those areas; that is followed by more than 100 more open-ended questions. In the back of the questionnaire is a set of appendixes covering a variety of topics, such as a list of requested documents, a template for references, and a template for portfolio investments.
ILPA is large enough to start and influence industry trends. It has nearly 300 members in such investor categories as public pensions, corporate pensions, endowments, foundations and family offices. Together they have more than $1 trillion in private-equity assets under management.