DiligenceVault is a technology platform adopted by asset allocators and asset managers to digitize, centralize, and automate the DDQ and due diligence process. A key aspect of due diligence is access to and exchange of comprehensive information, which can be in the form of key documents and responses to critical due diligence questionnaires.
How Do Asset Managers Use DDQs?
Asset managers maintain standard DDQs to distribute to prospective investors, and also respond to bespoke requests from asset allocators. When creating their standard DDQ materials, asset managers often rely on an industry benchmark, such as ILPA for Private Equity and AIMA for Hedge Funds.
How Do Asset Allocators Use DDQs?
Asset allocators and asset owners either accept asset managers’ diligence materials, or create and issue their own DDQs to ensure they have normalized and consistent diligence information across all their asset managers. When creating their own DDQ, asset allocators often reference industry benchmarks such as AIMA, ILPA, INREV, PRI, etc for best practices.
A List Of Digital DDQs On DiligenceVault:
At DiligenceVault, we have digitized essential industry DDQs, enabling asset allocators and asset managers to leverage digital functionalities to streamline their due diligence processes.
We categorize these DDQs into two section:
1. 15+ Asset Management Industry DDQ and Reporting Templates
Created by leading industry associations, these diligence questionnaires and templates ensure standardized due diligence across various asset classes. Below are some of the notable DDQs available on DiligenceVault designated as “INDUSTRY” templates:
- AFG (Association Française de la Gestion financière): The AFG DDQ is designed to ensure comprehensive coverage of the French asset management industry. It focuses on regulatory compliance, governance, risk management, and performance measurement, catering specifically to the needs of French asset managers and investors.
- AIMA (Alternative Investment Management Association): AIMA DDQs are globally recognized standards for alternative investments, including hedge funds. It aims to provide a thorough assessment of fund strategies, operational risks, governance, compliance, and performance, ensuring that investors have a deep understanding of their alternative investment portfolios.
- Diversity Project D&I DDQ: The Diversity Project D&I (Diversity and Inclusion) DDQ created by UK based asset owners assesses asset managers’ commitment to diversity and inclusion within their organizations. It covers policies, practices, and metrics related to D&I, aiming to promote greater transparency and progress in creating inclusive workplaces.
- EDCI (ESG Data Convergence Initiative): The EDCI DDQ focuses on the convergence of ESG (Environmental, Social, and Governance) data for private markets. It includes comprehensive sections on ESG metrics, reporting standards, and best practices, helping investors assess the ESG performance and commitment of asset managers.
- IAA (Investment Adviser Association): The IAA DDQ is tailored for investment advisers, emphasizing fiduciary duties, regulatory compliance, ethical standards, and client servicing. It helps investors assess the credibility and reliability of their investment advisers.
- ICI Distributor DDQ (Investment Company Institute): The ICI Distributor DDQ focuses on mutual fund distributors. It covers key aspects such as compliance with distribution regulations, marketing practices, operational efficiency, and investor protection, ensuring that distributors meet industry standards.
- ILPA DDQ (Institutional Limited Partners Association): The ILPA DDQ is specifically designed for private equity investments. It provides a detailed assessment of fund terms, governance, performance metrics, and transparency, helping limited partners (LPs) make informed investment decisions.
- ILPA Fee Template: The ILPA Fee Template standardizes the reporting of fees and expenses in private equity funds. It enhances transparency and consistency in fee disclosure, enabling LPs to better understand and evaluate the cost structures of their investments.
- INREV (European Association for Investors in Non-Listed Real Estate Vehicles): The INREV DDQ caters to non-listed real estate vehicles, covering aspects such as fund structures, governance, risk management, performance measurement, and ESG considerations. It aims to provide investors with a comprehensive view of their real estate investments.
- InvestEurope DDQ: The InvestEurope DDQ is tailored for private equity and venture capital firms in Europe. It includes comprehensive sections on governance, operational practices, investment strategy, and performance, helping investors gain a detailed understanding of these asset classes.
- NCREIF PERA Reporting Standards: The NCREIF (National Council of Real Estate Investment Fiduciaries) Performance Reporting Standards (PERA) DDQ focuses on real estate investments. It standardizes the reporting of performance metrics, ensuring consistency and transparency in evaluating real estate portfolios.
- PLSA Voting Template (Pensions and Lifetime Savings Association): The PLSA Voting Template standardizes the reporting of voting practices by asset managers. It ensures that investors have clear and consistent information on how their asset managers are exercising their voting rights, supporting better governance and accountability.
- PRI DDQ (Principles for Responsible Investment): The PRI DDQ focuses on responsible investment practices, emphasizing ESG criteria. It helps investors assess how asset managers integrate ESG factors into their investment processes, promoting sustainable and ethical investment practices.
- SBAI DDQ (Standards Board for Alternative Investments): The SBAI DDQ provides a comprehensive framework for due diligence in alternative investments. It includes detailed questions on governance, compliance, risk management, and operational practices, helping investors thoroughly assess alternative investment managers.
- TCFD Reporting (Task Force on Climate-Related Financial Disclosures): The TCFD DDQ provides a framework for consistent climate-related financial risk disclosures. It helps investors understand how asset managers assess, manage, and disclose climate-related risks and opportunities, promoting transparency and sustainability.
2. 10+ Ad Hoc Surveys and Event Driven DDQs
Team DiligenceVault proactively creates ad hoc and event driven DDQs to capture key industry changes and significant events, and are available as “SYSTEM” templates. These are made available to all clients of DiligenceVault.
Asset allocator clients can use these to survey their managers, especially during significant structural changes or stress events within the industry. Asset manager clients can survey their counterparts and vendors, while also building proactive responses to these questions in their Q&A content library.
- AI DDQs – these DDQs help assess Generative AI capabilities, data security, acceptable use, use cases and risk management by asset managers and vendors. These include Gen AI DDQ for Asset Managers and Gen AI DDQ for Vendors
- Market Infrastructure and Regulatory Changes – These group of DDQs help assess asset managers views and readiness around key market structure or regulatory changes. These include SEC’s Names Rule Amendment and T+1 Settlement Survey.
- High Priority Exposure Related – In instances of systematic or idiosyncratic stress events, timely access to accurate exposure information is critical. These DDQs help assess risk exposures and help prepare a response, and include Conflict Preparedness Survey, Credit Suisse Exposure Request, Pandemic Survey, and SVB, First Republic and Tech Banking Crisis Survey
- IT / Security Event Related – Cybersecurity risks and vulnerability management are important areas of focus. These DDQs help assess exposure to known vulnerability and remediation steps, and include Log4j Vulnerability Survey, MOVEit DDQ, and SolarWinds Orion Survey
Transparency is crucial for building remediation and managing downstream transparency needs for all stakeholders. By providing system DDQs and reporting templates, our goal is to be a vital resource for all clients, reducing the burden of creating and responding to bespoke DDQs and templates during critical events.
Who Maintains DDQs on DiligenceVault? Can DiligenceVault Add a New DDQ for Our Use Case?
DiligenceVault client success team proactively monitors changes to the industry DDQs, and updates the digital versions on the platform for ease of use for all clients. We also rely on our clients to let us know if they would like a new industry or ad hoc DDQ digitized on DiligenceVault. As always, please contact us at ask@diligencevault.com.
How Do I Enable Access to Industry and System Templates?
DiligenceVault clients can easily enable access to these by following the provided steps.
- The access to industry templates can be enabled from the Firm Settings
- Admin users can access the firm settings by clicking on their name in the upper right
- Navigate to the Firm Settings > Preferences > Firm Preferences > Questionnaire Defaults section
- Select the option for “Show system / industry questionnaires such as ILPA, PRI, InvestEurope”.
If you do not see a template in your view, please email us at ask@diligencevault.com. Access to select templates may require membership of select industry associations or approvals of the owners of these DDQs, and we can help coordinate that on your behalf.
