ILPA Due Diligence Questionnaire (DDQ): Template and Best Practices

If you're raising a fund from institutional limited partners, there's one document you'll almost certainly need to produce — and most emerging managers underestimate how much it matters.

The ILPA Due Diligence Questionnaire, known as the ILPA DDQ, has become the de facto standard for how institutional LPs evaluate fund managers before committing capital. Getting it right isn't just a box-checking exercise. It's an opportunity to present your firm's story, operational rigor, and investment thesis in the exact format that sophisticated allocators expect.

This guide breaks down what the ILPA DDQ is, what's inside it, how to complete it effectively, and the best practices that separate managers who win institutional capital from those who don't.

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What Is the ILPA DDQ?

The Institutional Limited Partners Association (ILPA) is a global nonprofit organization representing LP interests in the private equity and venture capital ecosystem. Its membership includes pension funds, endowments, sovereign wealth funds, family offices, and fund-of-funds that collectively manage trillions of dollars in assets.

ILPA publishes a range of standardized templates and guidelines designed to improve transparency, alignment of interests, and operational standards across the industry. The ILPA DDQ is one of its most widely adopted tools — a standardized questionnaire that LPs use to conduct initial and ongoing due diligence on fund managers.

Before ILPA released its template, every LP had its own proprietary questionnaire. Managers raising from multiple institutional LPs could find themselves completing dozens of different forms, each asking slightly different versions of the same questions. The ILPA DDQ streamlined this process by creating a common framework that most institutional LPs now accept as a baseline, often supplementing it with a handful of firm-specific questions rather than requiring a completely custom document.

The current version — the ILPA DDQ Version 2.0, updated in collaboration with the Emerging Markets Private Equity Association (EMPEA) — covers both established and emerging managers across geographies and strategies.

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What Does the ILPA DDQ Cover?

The ILPA DDQ is comprehensive by design. It's organized into major sections that mirror how institutional investors actually think about manager evaluation.

Firm Overview and Organizational Structure

This section captures the basics: when your firm was founded, ownership structure, headcount, office locations, and any significant organizational changes. LPs are looking for stability here. Frequent turnover, unclear ownership, or a history of spin-outs and restructurings will raise questions that you'll need to address proactively.

Investment Team and Key Personnel

Personnel is often the first thing institutional LPs scrutinize. The ILPA DDQ asks for detailed information on investment professionals — their backgrounds, tenure at the firm, carry participation, and time allocation across roles. If you have a small team where partners wear multiple hats, be transparent about how responsibilities are divided. Trying to paper over thin team depth with vague titles rarely works with experienced allocators.

This section also covers succession planning and key person provisions. Institutional LPs, especially those with longer investment horizons like pension funds and endowments, want to understand what happens to their capital if your lead partner departs.

Investment Strategy and Process

Here you'll describe your investment thesis, target sectors, geographies, and stage focus. The ILPA DDQ asks you to articulate your sourcing strategy, deal evaluation process, investment decision-making authority, and portfolio construction approach.

Be specific. Generic language like "we invest in high-quality companies led by exceptional founders" tells an LP nothing about your competitive advantage. The managers who stand out in this section can explain precisely why deals come to them, how they differentiate attractive opportunities from mediocre ones, and what role each team member plays in the process.

Track Record and Performance

This is where institutional LPs spend the most time. The ILPA DDQ requires detailed performance data broken down by fund, vintage year, and often by individual investment. Standard metrics include:

• TVPI (Total Value to Paid-In Capital)
• DPI (Distributions to Paid-In Capital)
• RVPI (Residual Value to Paid-In Capital)
• IRR (Internal Rate of Return) — gross and net
• Investment multiples at the deal level

For emerging managers without a long institutional track record, this section requires careful thought. LPs understand that early-stage venture returns take time to materialize, but they'll still expect you to present whatever data you have — including any pre-fund angel or scout investments, deal-by-deal attribution from prior firms, or co-investment track records — with appropriate context.

Misrepresenting or cherry-picking performance data is both ethically wrong and practically counterproductive. Institutional LPs have seen every version of inflated track records, and when they catch inconsistencies during reference checks or portfolio audits, it's an immediate disqualifier.

Fund Terms and Economics

The DDQ captures your current fund's proposed terms: management fee structure, carried interest percentage, preferred return hurdle, GP commitment, clawback provisions, and fund life. ILPA has published its own fee and terms guidelines, and many institutional LPs will benchmark your terms against those recommendations.

A management fee above 2% or carry above 20% isn't automatically disqualifying, but you'll need a clear rationale. Conversely, terms that are unusually LP-friendly can also raise questions about whether your economics are sustainable for your team.

Operational Infrastructure

Often underestimated by first-time fund managers, the operational due diligence section covers your fund administrator, auditor, legal counsel, prime broker (if applicable), compliance program, cybersecurity policies, and insurance coverage.

Institutional LPs — particularly pension funds and endowments operating under fiduciary obligations — can't invest in funds that lack basic operational controls. Using a reputable third-party fund administrator, having a recognized audit firm, and demonstrating that you have written compliance policies are table-stakes requirements at this level.

ESG and Diversity, Equity & Inclusion

Reflecting the evolving priorities of institutional allocators, the ILPA DDQ includes dedicated sections on ESG integration and DEI practices. LPs increasingly want to know whether ESG factors are considered in investment decisions, how you engage with portfolio companies on these issues, and what your firm's own DEI metrics look like at the team level.

This is no longer a soft add-on for a subset of mission-driven LPs. Pension funds operating under state mandates, European institutional investors, and many endowments now treat ESG and DEI disclosure as a prerequisite for consideration.

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The ILPA Reporting Template: A Companion Tool

The ILPA DDQ is primarily a fundraising and onboarding tool, but ILPA also publishes a separate ILPA Reporting Template (sometimes called the ILPA Capital Call and Distribution Notice Template or the ILPA Fee Reporting Template) that covers ongoing LP reporting obligations.

This set of templates standardizes how GPs communicate capital calls, distributions, and fees to their LPs throughout the fund's life. The key components include:

• Capital Call Notices — standardized format for drawdown timing, purpose, and amount
• Distribution Notices — standardized reporting for when and how distributions are returned to LPs
• Fee and Expense Reporting — the ILPA Fee Transparency Template, which breaks down management fees, fund expenses, and portfolio company fees in a consistent format

Institutional LPs have pushed hard for adoption of these reporting templates because inconsistent reporting formats across a portfolio of 30+ fund relationships creates enormous administrative burden on their end. Managers who adopt ILPA reporting templates signal operational maturity and reduce friction in the LP relationship.

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Best Practices for Completing the ILPA DDQ

Start Early and Build a Master Document

The ILPA DDQ is long. Completing it thoroughly the first time will take weeks of coordinated effort across your investment and operations teams. Build a master version of your DDQ that can be updated after each fund close and each annual review — this becomes a living document rather than a fire drill every time a new LP asks for it.

Answer Every Question, Even the Uncomfortable Ones

Leaving sections blank or writing "N/A" on questions that do apply to you is a red flag. If you have a difficult situation to address — a key person departure, a write-off in a prior portfolio, a legal matter — address it directly and in context. LPs expect complexity; they don't expect managers to pretend complexity doesn't exist.

Align Your DDQ With Your Pitch Narrative

Your DDQ and your LP pitch deck should tell a consistent story. If your deck emphasizes a proprietary sourcing network but your DDQ's description of deal flow is generic and thin, that inconsistency will surface in LP meetings and create doubt.

Have Legal and Compliance Review the Final Document

The ILPA DDQ includes representations about your firm, your track record, and your compliance history. Before submitting it to any institutional LP, have outside legal counsel review it for accuracy and to ensure you haven't made inadvertent material misstatements.

Update It Regularly

A DDQ that reflects last year's team, fund terms, or AUM is worse than no DDQ at all. Institutional LPs will cross-reference your DDQ against your Form ADV, your audited financials, and the information your references provide. Keeping the document current protects both your credibility and your legal standing.

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Key Takeaways

The ILPA DDQ isn't just paperwork — it's the primary framework through which institutional limited partners evaluate whether your firm meets their operational, strategic, and fiduciary standards. For emerging managers seeking to build an institutional LP base, treating the DDQ as a strategic document rather than an administrative burden is one of the highest-leverage things you can do in your fundraising process.

Use the ILPA template as a foundation, invest time in making your answers specific and honest, adopt the companion ILPA reporting templates for ongoing LP communications, and update your DDQ as your firm evolves. The managers who do this consistently are the ones who get meetings — and close them.