How LPs Actually Use the ILPA DDQ 2.0 to Vet a First-Time Fund Manager

The ILPA Due Diligence Questionnaire 2.0 is the standardized 20-section form the Institutional Limited Partners Association publishes so LPs can evaluate a fund manager on the same terms every time, instead of reinventing the questionnaire for each new GP pitch. It matters because most institutional LPs now use some version of it as their diligence baseline, which means a manager's DDQ answers, not their pitch deck, get cross-referenced, verified, and argued over at the investment committee. I have read enough of these to know where the real information lives and where it hides, and this piece walks through both.

What the ILPA DDQ 2.0 actually covers

ILPA first published a due diligence questionnaire in 2013, updated it in 2016 and 2018, and released the current version, DDQ 2.0, in November 2021 after a public comment period and working sessions with LPs, GPs, and other industry bodies. The full document, a companion User Guide, and a Summary of Changes are free through ILPA's Due Diligence Questionnaire and Diversity Metrics Template page.

The document is organized into 20 numbered topic areas: Firm General Information, Fund General Information, Succession Planning and Key Persons, Investment Strategy, Co-Investments, GP-Led Secondaries and Continuation Funds, Credit Facilities, Investment Process, Team, Alignment of Interests, Market Environment, Fund Terms, Firm Governance and Risk and Compliance, Track Record, Accounting and Valuation, Reporting, Legal, Data Security and Technology and Third-Parties, ESG, and Diversity, Equity and Inclusion. Each section combines short-form yes-or-no questions with longer narrative questions, backed by eight lettered appendices requesting supporting documents: organizational charts, team member templates, reference templates, and templates for the fund, portfolio investments, continuation funds, and credit facilities.

The yes-or-no questions are not meant to be a scorecard. ILPA's own User Guide says explicitly that LPs should not use yes-or-no answers as the sole basis for an investment decision. They exist to flag issues that need a follow-up conversation, and the follow-up is where the real diligence happens.

ILPA acknowledges a limitation worth knowing up front. Its User Guide notes the DDQ was built with established private equity managers as the reference point, and emerging managers may lack complete answers for questions tied to predecessor funds or a long institutional history. ILPA is developing tailored modules for emerging managers, but the base DDQ is what circulates today, and LPs need to read incomplete answers from a two-year-old firm differently than the same gaps from a twenty-year-old one.

How to triage a 40-page response when time is short

A completed ILPA DDQ from an institutional-scale platform can run 150 to 300 questions counting the appendices. Most LPs I know do not read it front to back on a first pass. I triage in three passes.

First pass: the yes-or-no answers, scanned in five minutes. I look for anything marked "yes" next to a question about litigation, regulatory action, key person departures, or side letters that deviate from other LPs' terms, plus blank fields and lazy "N/A" responses on questions that clearly apply to the fund in front of me. PipelineRoad's due diligence glossary makes the point well: institutional allocators use the DDQ to identify gaps in operational maturity, and those gaps, not weak returns, kill more first-time and emerging manager allocations. A blank answer where a real answer should exist is itself a data point.

Second pass: three sections regardless of what the yes-or-no scan turned up: Track Record, Fund Terms, and Firm Governance and Risk and Compliance. These are where a first-time manager's story either holds together or falls apart, and I would rather spend 45 minutes there than spread the same 45 minutes evenly across all 20 sections.

Third pass: everything else, read for internal consistency rather than completeness. Does the team headcount in Section 9 match the organizational chart in Appendix A. Does the fund size in Fund Terms match what was pitched in the deck. One analyst quoted by LPbacked, a DDQ preparation resource, said they routinely find three or more inconsistencies in a single questionnaire once they compare it line by line against the deck and the data room. Any one mismatch might be sloppiness. A pattern of them is a governance signal.

The sections that surface the most red flags in first-time and emerging managers

Four sections do most of the diagnostic work, because these questions are designed to surface what a polished pitch deck is designed to smooth over.

Track Record and attribution. This is where the gap between what a GP claims and what a GP actually did tends to live. Section 14 asks for deal-level performance data, not just fund-level summary statistics, and asks GPs to identify their specific role in each transaction: did the person now raising a debut fund source the deal, lead the negotiation, sit on the board, or sit as the fourth of six people in a room where a senior partner made the call. I covered the mechanics of verifying this in an earlier piece on GP track record attribution. The short version: ask for a written attribution letter from the prior firm, cross-reference the GP's name against their SEC Form ADV filing history, and treat "we co-led" as a prompt for a follow-up question, not a finished answer. The SEC's Investment Adviser Marketing Rule (Rule 206(4)-1) restricts how predecessor performance can be advertised precisely because this gap is common enough to regulate.

Succession Planning and Key Persons. Section 3 is new to DDQ 2.0 as its own standalone section, which tells you ILPA's member LPs pushed for more visibility here. For an emerging manager, this section usually reveals a fund that is, in practice, one or two people. That is not automatically disqualifying. Most first funds are exactly that. But it means the key person clause in the LPA carries more weight than for a ten-partner platform. I want to see the clause drafted the way ILPA's Principles 3.0 recommend: key persons defined broadly enough to capture who actually drives investment outcomes, an automatic suspension of the investment period if a key person event triggers, and a defined vote threshold for reinstatement. If the DDQ response is vague about who counts as a key person, or the list conveniently excludes someone clearly central to the strategy, that is worth a direct question.

Fund Terms. Section 12 lays out management fee, carried interest, preferred return hurdle, GP catch-up, GP commitment, and clawback provisions, and ILPA has published its own recommended terms through the Principles and its Model Limited Partnership Agreements that most institutional LPs benchmark against. The GP catch-up is the waterfall provision letting the general partner take a disproportionate share of profit after LPs get their preferred return back, until the GP's overall share catches up to the agreed carry percentage. A 100% catch-up that kicks in fast is more aggressive than a partial or no catch-up. No-fault removal is the LP's ability to remove the general partner or dissolve the fund without proving misconduct, and ILPA's guidance calls for a two-thirds supermajority of LP interest to exercise it, plus a meaningful reduction in the removed GP's carried interest so a replacement manager has real economics to work with. When a first-time manager's LPA is silent on no-fault removal, or sets the threshold so high it is functionally unusable, that is a term I want renegotiated, not just noted.

Firm Governance, Risk and Compliance, and the operational sections. Thomas Murray's research on operational due diligence red flags is instructive here, even written with hedge funds in mind. The managers who present the greatest risk are rarely the ones whose questionnaires look obviously deficient. They have learned to answer the questions well enough to sound complete. The single most diagnostic question I ask is who calculates the fund's net asset value. The correct answer is an independent third-party administrator using independently sourced pricing, with the GP reviewing the output. The wrong answer, even dressed in confident language, is that the manager's own team produces the NAV and the administrator merely confirms it. The same logic applies to who reviews trade allocations and reconciles cash. If the answer is some version of "the person who made the investment decision also checks their own work," that is a structural problem no track record offsets.

A practical DDQ triage checklist for LPs

• Scan every yes-or-no answer first. Flag anything marked yes on litigation, regulatory history, or key person departures, and flag every blank or unexplained N/A on a question that plainly applies to this fund.
• Go straight to Track Record (Section 14). Ask for deal-level attribution, not fund-level summary IRR, and request a written attribution letter for any performance earned at a prior firm.
• Cross-reference the GP's name against their SEC Form ADV filing on the SEC's public Investment Adviser Public Disclosure database, and check prior regulatory actions independently rather than accepting the GP's characterization of them.
• Read Succession Planning and Key Persons (Section 3) for who is actually named a key person, and confirm the LPA's key person clause triggers an automatic suspension of the investment period, not just a notification requirement.
• Benchmark Fund Terms (Section 12) against ILPA's Principles 3.0 and Model LPA: check the catch-up structure, the no-fault removal threshold, GP commitment size, and clawback mechanics.
• In Firm Governance and Risk and Compliance, ask who calculates NAV and reconciles cash and positions, and whether those functions sit with an independent administrator or the manager itself.
• Confirm there is an engaged, credible auditor and fund administrator, and check whether the auditor's client roster is concentrated in funds tied to this one manager or sponsor group, a visible warning sign in the Madoff case.
• Cross-check every number and date across the DDQ, the pitch deck, the PPM, and the data room. Inconsistencies in fund size, headcount, or track record figures are a reliable proxy for how carefully the fund is run.
• Ask how operational infrastructure has scaled relative to AUM growth, not just headcount at launch. A manager who cannot name specific infrastructure investments made as the fund grew has probably not thought about it.
• Treat a refusal to provide an attribution letter as a data point to investigate, not an automatic disqualifier. Ask for an alternative: a documented board seat, a signed reference, or press coverage naming the GP on the deal.

What emerging managers should do before sending a DDQ to an LP

I have watched this from the GP side too. The managers who fundraise fastest treat the DDQ as an internal audit exercise months before any LP asks for it, not a form to fill out under deadline pressure. A few habits separate the managers whose DDQs hold up from the ones that create more questions than they answer.

Build the master DDQ during fund formation, not the first LP request. A GP who can return a fully completed questionnaire within a day or two signals operational readiness before the LP has read a single answer. A GP who takes three weeks signals the opposite, regardless of what the answers say.

Get the attribution documentation sorted before you leave your prior firm, not after. Cooperation from a former employer tends to decline once you have departed, especially once you are perceived as a competitor. If a formal attribution letter is not realistic, line up an alternative: a specific reference contact, a documented board seat, or press coverage that corroborates your role.

Engage a real fund administrator and auditor before you need to describe them in a DDQ. Institutional LPs generally expect a third-party administrator for funds above roughly $5 million, and while the first formal audit typically happens after a debut fund's first fiscal year, the auditor engagement needs to already be in place when an LP starts asking questions. A fund administrator typically runs in the tens of thousands of dollars annually, and treating that as optional is one of the more common reasons an otherwise promising first fund stalls with institutional allocators.

Do not leave fields blank. If a question genuinely does not apply, say why in a sentence rather than writing a bare "N/A." An LP reading a DDQ cannot distinguish "does not apply" from "did not want to answer this," and will assume the less charitable version.

Finally, read your own DDQ against your own pitch deck before an LP does it for you. If the deck says one fund size and the DDQ says another, or the deck implies you led eight deals and the attribution section tells a narrower story, that inconsistency costs more credibility than the underlying fact would have on its own.

Frequently Asked Questions

Is the ILPA DDQ 2.0 legally required for fund managers to complete?

No. ILPA is a trade association, not a regulator, and nothing compels a GP to use its questionnaire format. In practice, enough institutional LPs use some version of the ILPA DDQ as their baseline that a GP who refuses to complete it, or insists on a custom format instead, makes the process harder on themselves for no real benefit.

How is the ILPA DDQ different from a fund's private placement memorandum?

The private placement memorandum, or PPM, is the fund's own offering document describing its strategy, terms, and risk factors, drafted by the GP and its counsel to solicit commitments. The DDQ is an LP's evaluation tool that the GP fills out in response, and it should be checked against the PPM, the pitch deck, and independent sources rather than read as a standalone marketing document.

Can an LP still commit capital if a first-time manager cannot fully complete every DDQ section?

Often yes. ILPA's own User Guide acknowledges that emerging managers may lack complete answers to questions built around a long institutional history or a predecessor fund. What matters more than perfect completeness is whether the GP explains each gap honestly and offers a credible alternative, such as prior-employer references in place of formal fund-level track record data.

Where can I get the actual ILPA DDQ 2.0 document and its user guide?

ILPA publishes the full questionnaire, a companion user guide, and a summary of changes free through its resource library, linked from the Due Diligence Questionnaire and Diversity Metrics Template page on ilpa.org. The direct PDF is also available at ilpa.org/wp-content/uploads/2021/11/ILPA-DDQ-2.0.pdf.

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.