Limited Partner Due Diligence Questionnaire Template

Limited Partner Due Diligence Questionnaire Template

The Institutional Limited Partners Association (ILPA) Due Diligence Questionnaire v1.2 remains the industry standard for LP due diligence on fund managers. Released in its current form in 2018, this template covers operational, legal, and performance evaluation criteria that institutional LPs use to assess general partners before committing capital.

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Why Limited Partners Need Standardized Due Diligence

Here's what nobody tells emerging fund managers: LPs don't care about your deck until they've validated your operational infrastructure.

The limited partner due diligence questionnaire exists because institutional investors got burned. Too many times. Too many managers with great track records on paper couldn't answer basic questions about custody arrangements, valuation methodologies, or conflicts of interest policies.

According to ILPA (2018), their standardized questionnaire arose from LP demand for consistency across manager evaluations. Before this template, every LP created custom questionnaires. Fund managers filled out 40 different versions of the same questions. Nobody won.

The ILPA template covers seven core domains:

• Fund strategy and investment focus
• Organizational structure and governance
• Track record and performance metrics
• Investment process and portfolio construction
• Operations, compliance, and risk management
• Fee structures and alignment of interests
• ESG integration and diversity metrics

The questionnaire runs 50+ pages when fully completed. Most first-time fund managers underestimate completion time by 10x. What looks like straightforward questions about "custody arrangements" requires legal review, auditor coordination, and administrator sign-off.

What Questions Do Limited Partners Actually Ask?

The ILPA template doesn't waste time on softball questions. Every section probes for red flags.

Organizational structure questions dig into control: Who has final say on investments? What happens if the lead GP gets hit by a bus? How do you handle key person departures? These aren't theoretical — the same governance questions that trip up Series A founders destroy fund managers who haven't documented succession planning.

Track record verification separates reality from marketing copy: The template requires gross and net IRR by vintage year, broken out by realized vs unrealized gains. LPs want GIPS-compliant performance reporting. They'll verify your numbers with your administrator. Fudging returns doesn't just tank this fundraise — it blacklists you permanently.

Operations and compliance questions expose amateur hour: Do you have written compliance policies? When were they last reviewed? Who's your third-party administrator? What's your disaster recovery plan? GPs who answer "we handle that internally" to custody and valuation questions lose credibility immediately.

The template forces transparency on fees. Not just management fees and carry — every expense that flows through to LPs. Transaction fees, monitoring fees, broken deal expenses. ILPA (2018) includes specific language requiring disclosure of all GP-related party transactions. LPs know the games. They're asking because they've seen managers hide compensation in "consulting fees" to portfolio companies.

How Do You Complete the ILPA Due Diligence Questionnaire?

Most emerging managers make the same mistake: they try to fill it out themselves.

Bad idea. This document becomes the foundation for your Limited Partnership Agreement, your compliance program, and your investor reporting infrastructure. Get it wrong and you're explaining inconsistencies to LPs for the next 10 years.

Start with your fund administrator. They should have standard language for custody, valuation, and reporting sections. If your administrator can't provide questionnaire support, you picked the wrong administrator.

Involve your fund counsel early. Legal questions about GP structure, indemnification, and conflicts of interest require attorney review. Don't guess at regulatory compliance questions — one wrong answer triggers LP legal diligence that costs you weeks and legal fees you can't afford.

Prepare your performance data before you start. The questionnaire requires historical returns broken out multiple ways. If you're a first-time fund manager with no track record, you'll need personal investment history or co-investment performance. This takes weeks to compile properly. According to SEC marketing rules (2020), you can't cherry-pick deals — if you're showing wins, you're showing losses too.

Budget 40-60 hours for initial completion. Another 20 hours for review and revision. Another 10 hours per LP for customization — yes, even with a standard template, different LP types want emphasis on different sections.

What Do Institutional LPs Look for in Questionnaire Responses?

LPs aren't reading for content. They're reading for what you don't say.

Vague answers signal either incompetence or evasion. "We follow industry best practices for valuation" tells an LP you don't have documented valuation policies. The right answer includes your specific methodology, third-party validation process, and frequency of revaluation.

Institutional LPs flag these red flags immediately:

• Missing or incomplete compliance policies
• Self-custody of fund assets
• Related-party transactions without independent committee approval
• Performance calculations that don't match GIPS standards
• Generic answers to ESG questions (LPs know you copied from another manager)
• Inconsistencies between questionnaire and pitch deck

The diversity metrics section — added in ILPA's 2023 DEI Monitoring Questionnaire — trips up managers who haven't thought through their hiring and sourcing practices. LPs aren't looking for perfection. They're looking for honest assessment and improvement plans.

How Does Due Diligence Differ Across LP Types?

The ILPA template provides a baseline. Different LP types layer additional requirements on top.

Public pension funds add political and transparency requirements. They need state-specific disclosures. They want to know if you've had any regulatory violations, even settled ones. They require detailed placement agent disclosures — who introduced you, what they got paid, whether they're registered. These questionnaires run 80-100 pages.

Endowments and foundations focus on mission alignment and ESG integration. Their questionnaires probe deeper on impact measurement and negative screening criteria. They want to see how you voted proxies at portfolio companies. They care about board diversity at your portfolio companies, not just your fund.

Family offices ask different questions entirely. They want to know about your personal financial situation. They'll ask about your tax strategy for the fund. They care more about downside protection than home-run potential. Family office due diligence feels invasive because it is — they're betting on you personally, not just your strategy.

Fund of funds managers are the most rigorous. They're fiduciaries twice over. Their operational due diligence includes site visits, reference calls with your service providers, and background checks on your entire investment team. Budget 90-120 days from initial questionnaire to final commitment.

What Happens After You Submit the Questionnaire?

Submission triggers the real due diligence process. The questionnaire just qualified you for the starting line.

LPs review responses looking for follow-up items. Expect 20-40 clarification questions. Expect requests for supporting documentation — your compliance manual, your valuation policies, sample investor reports, your disaster recovery plan.

Expect reference calls. LPs will call your administrator, your auditor, your prior investors. They'll call founders you've backed. They're verifying everything you wrote, but more importantly, they're listening for what those references don't say. The same reference call dynamics that tank founder fundraises apply to fund managers.

Operational due diligence often includes on-site visits. LPs want to see your office, meet your team, review your systems. They're assessing culture and operational maturity. Can't demonstrate your compliance monitoring system? That's not a theoretical question — show them the actual dashboard you use daily.

Timeline from questionnaire submission to LP decision:

• Initial review: 2-3 weeks
• Follow-up questions and documentation: 3-4 weeks
• Reference calls and operational due diligence: 3-4 weeks
• Investment committee presentation and approval: 2-4 weeks
• Legal documentation and closing: 4-6 weeks

Total: 14-21 weeks minimum for institutional LP commitments. That's why fundraising takes longer than first-time managers expect. You're not closing one LP — you're managing 8-12 parallel due diligence processes at different stages.

How Should Emerging Managers Prepare Before Fundraising?

Don't wait until you're fundraising to think about due diligence responses. The questionnaire exposes operational gaps that take months to fix.

Set up your service provider infrastructure before you start marketing. You need a fund administrator, a law firm, and an auditor. All three will support your questionnaire responses. Trying to hire these providers mid-fundraise signals poor planning to LPs.

Document your investment process in writing. Not for the questionnaire — for yourself. How do you source deals? What's your evaluation framework? How do you make investment decisions? The questionnaire forces you to describe this process. If you're making it up as you write, LPs will notice.

Develop written compliance policies before Fund I closes. You need conflicts of interest policies, personal trading policies, and valuation policies. You can't credibly answer compliance questions with "we'll implement that after our first close." LPs expect functional compliance programs from day one.

Build your track record documentation systematically. If you're coming out of another firm or have personal investments, start organizing that data now. Pull portfolio company cap tables. Document your role in each investment. Calculate performance metrics properly. This isn't something you can reconstruct accurately under fundraising time pressure.

What Tools and Resources Support Questionnaire Completion?

The ILPA Due Diligence Questionnaire v1.2 is freely available as a PDF. Download it. Print it. Start filling it out even if you're 18 months from fundraising. The questions reveal what you need to build.

Most fund administrators offer questionnaire support as part of their service packages. Better administrators maintain libraries of standard responses for operational and compliance questions. They've seen hundreds of completed questionnaires. Use their institutional knowledge.

Fund formation attorneys should provide questionnaire review. They'll flag legal issues in your responses before LPs see them. They'll ensure consistency between your questionnaire, your LPA, and your marketing materials. Legal inconsistencies between documents suggest operational sloppiness — the kiss of death in institutional fundraising.

Data room providers (Carta, Fundstack, Altvia) often include questionnaire management features. These tools version control your responses, track which LPs received which versions, and flag questions you haven't answered. For managers raising from 15+ LPs, this workflow management prevents errors.

How Do Due Diligence Standards Continue Evolving?

The ILPA template isn't static. ESG requirements expanded significantly between the 2016 and 2018 versions. The 2023 DEI Monitoring Questionnaire added entirely new sections on workforce diversity and inclusive sourcing practices.

Cybersecurity questions intensified after high-profile breaches at fund administrators. LPs now ask detailed questions about data security, encryption standards, and breach notification procedures. If you're storing LP data on consumer-grade cloud services, that won't pass institutional muster.

Crypto and digital asset questions emerged in 2021-2022 as funds started holding tokens and NFTs. LPs want to know your custody solution for digital assets, your valuation methodology for illiquid tokens, and your regulatory compliance approach. The ILPA template hasn't fully caught up to crypto-native fund structures — expect custom questions from LPs in this area.

According to ILPA (2026), their latest guidance on SFDR 2.0 compliance creates new disclosure requirements for European LPs. Just as founders need to understand dilution mechanics, fund managers need to stay current on evolving LP disclosure standards across jurisdictions.

Related Reading

• Raising Series A: The Complete Playbook — due diligence parallels for founders
• Stop Wasting Time on Generic Investor Lists — LP targeting strategy
• Why Founders Skip Angels (And Regret It) — capital source decision frameworks

Frequently Asked Questions

How long does it take to complete the ILPA due diligence questionnaire?

First-time completion typically requires 40-60 hours of focused work, plus another 20 hours for legal and administrator review. Experienced fund managers with established infrastructure can complete it in 20-30 hours using prior responses as templates.

Do I need to complete the entire ILPA questionnaire for every LP?

Most institutional LPs expect responses to all ILPA template sections, but different LP types emphasize different areas. Family offices may skip some institutional governance questions, while pension funds will add state-specific requirements beyond the base template.

Can I use the same questionnaire responses for multiple fundraises?

Yes, but update them. Performance data, team composition, and portfolio details change between fundraises. LPs expect current information. Using stale responses from Fund I when raising Fund II signals poor operational discipline.

What happens if I can't answer a questionnaire question?

Be honest. "Not applicable" is acceptable for questions that don't fit your strategy. "We don't have this policy yet but plan to implement it by [date]" works for emerging managers. Vague non-answers or obviously false responses kill your credibility permanently.

Do smaller LPs require the same due diligence depth as institutions?

High-net-worth individuals and small family offices typically conduct lighter due diligence than pension funds and endowments. However, sophisticated individual LPs often have institutional backgrounds and ask institutional-quality questions. Don't assume smaller check size means lower scrutiny.

How often should I update my due diligence questionnaire responses?

Update quarterly if you're actively fundraising. Annual updates minimum even between fundraises. Major events — key hires, strategy pivots, regulatory changes — trigger immediate updates. Stale questionnaire responses suggest you're not monitoring your own operations closely.

What's the difference between the ILPA DDQ and the DEI Monitoring Questionnaire?

The DEI Monitoring Questionnaire, released by ILPA in 2023, focuses specifically on diversity metrics at the GP level and portfolio company level. It's designed to supplement the main DDQ with deeper diversity, equity, and inclusion data collection and monitoring.

Do I need a fund administrator before completing the questionnaire?

Strongly recommended. Many operational questions require administrator input or verification. LPs view "we'll hire an administrator after closing" as a red flag. Established fund infrastructure signals you're serious about professional management.

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