AIMA Debuts Modernized DDQ Template

Oct 13 2017 | 10:06pm ET

The Alternative Investment Management Association (AIMA) has published a new edition of its flagship due diligence questionnaire two decades after the first “AIMA DDQ” helped to standardize the due diligence process for alternative investment managers and investors.

The new Illustrative Questionnaire for the Due Diligence of Investment Managers will be used by investors assessing hedge fund, private credit and private equity managers, AIMA said in a statement Friday. The completion of a due diligence questionnaire is generally regarded as one of the most significant steps taken by investment managers prior to receiving an allocation. 

The first AIMA DDQ, published in 1997, was mostly geared to managed futures funds, and contained around 100 questions about the investment manager and the fund, AIMA continued. Subsequent editions expanded into additional investment strategies, reflected changing business practices, and accounted for evolving regulations.

The new DDQ, developed in consultation with investment managers and investors, specifically covers private credit and private equity strategies as well as hedge funds. It also integrates the formerly separate DDQs specific to funds of funds managers and CTAs, AIMA said. 

In addition, the new questionnaire further explores an investment manager’s governance and operations and risk management processes, a reflection of the substantially expanded due diligence process undertaken by investors today. Furthermore, the new DDQ has a modular functionality that will allow managers to fill out only those sections that apply to their businesses and the specific types of products they are offering.

“The due diligence process has evolved significantly since the first AIMA DDQ was published in 1997,” said AIMA CEO Jack Inglis in the statement. “Ever more investors are undertaking significant due diligence processes prior to making an investment. Many alternative investment fund managers have transformed into diversified multi-strategy, multi-product firms seeking investments from a wide range of investors. 

“These factors have created challenges for investment managers and for investors alike,” he added. “Reacting to these pressures, AIMA has modernized its suite of DDQs, making them more flexible, easier to complete and more data-driven than before.”

AIMA has also created DDQs for use in assessing fund directors, fund administrators and cyber security vendors.

AIMA is a global alternative investment industry association with 1,840+ corporate members in more than 55 nations. It is the co-founder of the well-known Chartered Alternative Investment Analyst designation, and its manager members collectively manage more than $1.8 trillion in assets worldwide.

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