Due Diligence Questionnaires

For 20 years, AIMA has been providing guidance and standardisation for its members around the world in the form of Due Diligence Questionnaires (DDQs). 

AIMA's DDQs assist a) investors in assessing the fund investments they might make and b) fund managers in their choice of service providers, directors and boards of those funds.   The first AIMA DDQ - for investors conducting due diligence on hedge fund managers - was published in 1997.   It was a response to requests from investors for a standardised set of questions.   Since then, the DDQs have gone on to become the industry-standard template. The AIMA DDQs can be downloaded by AIMA members below.


Why is it useful for there to be a standardised set of questions?

Standardised questions help investors compare like-for-like when they receive responses from multiple managers. Managers like standardised questions because it reduces the amount of work they have to do and helps them reassure investors that they are all receiving the same information.  Even in the absence of an investor request for information, a standard set of questions can be helpful for new managers who are seeking to assess their own practices against industry standards.

Who uses the DDQ and how does it fit into the overall DD process?

The AIMA hedge fund manager DDQs are used by investors from all around the world and by many of AIMA’s manager members.  For investors, the DDQ is an early step in the due diligence process but by no means is it the last step. Investors use the information they get from the responses to these questions to develop areas of focus for further questions and discussion with managers and to cross check information from other sources.

The new 2017 DDQ for investment managers has multiple modules. What is the easiest way for me to get started?

In situations where the investment manager is managing open-end funds, the easiest place to start is the Basic Open-End Setup and then add or replace modules as needed. Similarly, if the investment manager is managing closed-end funds, the easiest place to start is the Basic Closed-End Setup. Platform providers should start with the Basic Platform Provider Setup. Third party sub-advisory relationships should start with the Basic Sub-Adviser Setup. If the sub-advisory relationship is with an affiliate, however, consideration might be given as to whether it makes sense to discuss the sub-adviser as part of the “investment manager” for purposes of the modules regarding the investment manager.

When should investors anticipate being able to get information from most managers on this new form?

The new form is in a substantially different format from the prior versions and contains lots of questions. AIMA anticipates it will take most managers several months to work through the new form and fill it in. With the launch happening over the course of October/November 2017, it is reasonable to expect that investment managers will begin using the new form for their regular update to occur in 2018.