A well-populated data room is not the same as a decision-ready diligence record. The task is to connect the evidence to the questions the firm needs to answer, distinguish facts from interpretation and make unresolved issues visible to the people approving the commitment.
Begin with the decision questions
Define why the manager is being considered and what role the fund would play in the proposed programme. Then set the diligence questions that could change that view. Questions about strategy, team, track record, operating arrangements and alignment should be tied to an actual assessment rather than collected as a checklist with no owner.
The ILPA Due Diligence Questionnaire is a useful industry reference for organising manager questions. A standard questionnaire provides structure; the firm still needs to adapt the work to its mandate, the strategy and the evidence available.
Keep sources attached to conclusions
For each material conclusion, record the supporting document, reporting period and date received. Identify whether information was supplied by the manager, an administrator or another source. If a claim cannot yet be substantiated, record the gap plainly.
The same discipline applies to track-record comparisons. Differences in period, currency, scope and methodology should remain visible. A table that makes funds look comparable by removing those distinctions can be less useful than a careful explanation of why they are not directly comparable.
Distinguish an open question from a negative finding
Missing information, conflicting evidence and a concern confirmed through review are different states. Combining them into a single red flag makes the follow-up process harder to manage. Give every open item an owner, the evidence requested and a decision on whether it must be resolved before approval.
An investment committee should be able to see what the team believes, why it believes it and where judgement is still being exercised. A concise assessment supported by a traceable evidence record is more useful than a long document that obscures uncertainty.
Carry the important questions into monitoring
Diligence does not end when the approval memo is signed. The conditions, concerns and reporting expectations that shaped the decision should inform the subsequent monitoring plan. Translate them into items the team can revisit when new information arrives.
An effective handoff includes the final approval, any conditions, the key evidence and the next review dates. It also identifies who owns the relationship and who tracks outstanding information. This keeps the original investment rationale connected to the portfolio’s ongoing oversight.
Further reading
ILPA — Due Diligence Questionnaire and industry standardsExternal resources provide industry context. The practical framework above is GlobalFoFs editorial commentary.
For general discussion and capability development. This article is not an investment recommendation or advice on any particular fund or portfolio.
