27 February 2023

The Alternative Investment Management Association (AIMA), together with leading digital asset investors and industry experts, has today published a new set of due diligence questionnaires (DDQs) for digital asset investment managers and funds (available for download here).

The release is timely given the increased scrutiny of the risks involved when allocating to digital assets and investors’ heightened demand for transparency. These DDQs have been primarily designed for investors to evaluate the unique investment and operational risks that come with allocating to digital asset investment funds. They will also assist investment managers in the space to meet investor demands for transparency more efficiently by creating a comprehensive standard template for information sharing. There are versions for open-ended funds as well as closed-end fund vehicles so that these templates can be used by hedge fund, venture capital and hybrid funds.

The questionnaires address: strategy, trading, risk management, leverage, liquidity risk, and fund service providers including custody, costs and expenses, performance and valuation.

These DDQs are the initiative of AIMA’s Digital Assets Working Group (AIMA DAWG) – a cross section of senior industry experts including investment managers, allocators, custodians, exchanges and other service providers. It is tasked with driving AIMA’s regulatory engagement, thought-leadership initiatives, and operational guidance in the area of digital assets.

AIMA’s CEO Jack Inglis said: “Events last year further demonstrated the need for digital asset investors to undertake significant due diligence processes prior to making an investment. Following the publication of our operational guidance on digital asset custody, this new set of due diligence questionnaires for digital asset investment managers and funds can help to standardise the due diligence process around this growing asset class. My thanks to all our members who contributed to producing this useful resource for the alternative investment community.”

Other DDQs that AIMA have created are used to assess investment managers, fund directors, fund administrators and cyber security vendors. AIMA’s first due diligence questionnaire for hedge funds was published in 1997.

Notes to Editors

• The DDQs are available only to AIMA members. 
• Under the DDQ’s terms of use, investment manager members of AIMA may provide completed DDQs to both members and non-members and receive them from both members and non-members. If an investment manager that is not an AIMA member obtains the blank DDQ from an investor, manager or platform provider that is an AIMA member, that investment manager can fill it in and provide it only to that requesting AIMA member. All other uses by non-members are not permitted uses.
   

 About AIMA

The Alternative Investment Management Association (AIMA) is the global representative of the alternative investment industry, with around 2,100 corporate members in over 60 countries. AIMA’s fund manager members collectively manage more than US$2.5 trillion in hedge fund and private credit assets. AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives such as advocacy, policy and regulatory engagement, educational programmes and sound practice guides. AIMA works to raise media and public awareness of the value of the industry. AIMA set up the Alternative Credit Council (ACC) to help firms focused in the private credit and direct lending space. The ACC currently represents over 250 members that manage US$800 billion of private credit assets globally. AIMA is committed to developing skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the first and only specialised educational standard for alternative investment specialists. AIMA is governed by its Council (Board of Directors). For more information, visit www.aima.org.