Our research initiatives are focused on providing ILPA members with resources that make them more effective at their job. Additionally, tools such as the Members’ Edge database, the ILPA Private Markets Benchmark and the Due Diligence Questionnaire Tool bring added efficiencies and research capabilities to all participants in private equity.
Members’ Edge is an online database that provides ILPA members with real-time industry data, including detailed profiles for thousands of GPs and funds. The database is a valuable service that benefits the entire industry, as it provides a platform for limited partners to efficiently research the private equity universe in a cost-effective manner.
To ensure that accurate, detailed information is available to the ILPA’s 300+ member organizations, GPs can elect to update their own profiles. Using the Members’ Edge subscription service, GPs control the content of their profiles in real-time via their password-protected ID. Their profiles will be viewed by a global base of institutional limited partners that are researching the private equity universe.
GP subscribers that contribute their performance data to our benchmarking initiative will also receive the quarterly ILPA Private Markets Benchmark reports.*
How do ILPA Members Benefit from Members’ Edge?
How do GPs Benefit from a Subscription?
Included in annual ILPA membership fee
Access to online profiles for over 2,500 GPs and 6,400 funds (and growing)
Data includes investment criteria, fundraising information, contact information and key fund metrics
User-friendly search functionality allows ILPA members to generate customized GP and fund results
Customized search results and online profiles can be used for research, screening, networking and onsite-planning purposes
Search results can be downloaded and sorted
Online profiles are printable
Profile your firm to 300+ institutional LPs, who represent 2,000+ investment professionals that use Members’ Edge to research the private equity universe in a cost-effective manner
Provide relevant content about your firm and each of your funds
Ensure the accuracy of your profile pages by making unlimited, real-time edits
About the ILPA Private Markets Benchmark Initiative
A top priority of the ILPA is to provide a private markets benchmark that accurately and consistently represents the investable universe and asset class performance for global, institutional investors.
The ILPA Private Markets benchmark contains over 3,100 funds, and is reported in seven separate components:
U.S./Canada Private Equity & Venture Capital
Europe Private Equity & Venture Capital (each expressed in EUR & USD)
Asia Pacific Private Equity & Venture Capital
Fund of Funds & Secondary Funds
All Funds (inclusive of the other 6 components)
In 2012, the ILPA entered into a five-year agreement with Cambridge Associates, a leading institutional advisor and private investments benchmark provider, to jointly construct the ILPA Private Markets Benchmark. The combination of Cambridge Associates’ extensive database of performance information and the high rate of ILPA member participation has resulted in a robust benchmark.
During the initial development of the benchmark, the ILPA gathered a preliminary list of fund holdings from over 100 members. The inaugural release represented over 2,400 unique funds. Since then, the list of benchmark funds has increased to over 3,100, representing a significant cross-section of fund commitments made by institutional investors. The aggregate performance of these funds is reported in the form of composite reports, characterized by strategy, geography and vintage.
ILPA Member Participation
To further the development of the benchmark, the ILPA seeks to increase the number of member-contributors to the list of benchmark funds. This list includes the primary funds, co-investment funds, secondary funds/interests, separate account vehicles and fund-of-funds in members’ portfolios.
Contributing members will remain anonymous and all information gathered through this effort will be confidential and aggregated on a non-identifiable basis. Subject to approval, contributing members will also receive access to the Cambridge Associates’ Benchmark Calculator program at a significantly reduced rate.
Please note, the ILPA Private Markets Benchmark is currently available to all members, as well as eligible General Partners through their Members’ Edge subscription.
The FAQ below covers many of the basic questions about this initiative. Member participation is paramount and the ILPA is ready to address all questions and concerns. Members should contact firstname.lastname@example.org to learn more about this initiative, or to become a benchmark contributor.
As institutional investors increase their focus on issues related to alignment of interest, governance and transparency with their private equity manager relationships, the level of detail required for their upfront fund diligence process has increased. This increase has resulted in the proliferation of lengthy, customized due diligence questionnaires (“DDQ”) by many Limited Partners, advisors and placement agents. These customized DDQs, which have varying content and length, have created an extraordinary administrative burden on all interested parties, including Limited Partners, General Partners and Placement Agents.
Additionally, to ensure they are cognizant of the industry’s best practices, LPs are attentive to the types of diligence questions their peers are asking. With few available forums dedicated to the sharing of diligence practices, some Limited Partners may not even be aware of the level of detail being provided to their peers regarding a prospective fund.
The search for a more efficient process, and a means of minimizing the administrative burden of fundraising on all parties, prompted the ILPA to reach out to General Partners, Limited Partners, Placement Agents and other interested parties to craft a DDQ tool that may offer those efficiencies. The resources used to create and process the customized, but often redundant, questions and responses could then be re-purposed toward additional transparency, assessment and analysis of results.
The ILPA Due Diligence Questionnaire (“ILPA DDQ”) was compiled from over a dozen sample questionnaires provided by LPs, GPs and third parties. It has been reviewed by the members of the ILPA Research, Benchmarking & Standards Committee, as well as several industry leaders as part of a six-month, public comment period.
Please note that the ILPA DDQ is not intended to be a required document that all GPs must adopt. It is also not a panacea for all LPs’ diligence needs. We acknowledge that some variation may still be employed in the industry. The goal of the DDQ Tool is to limit those variations to the few additional questions specific to that LP or GP.
The ILPA DDQ covers many topics related to fund diligence, including:
General Firm Information
General Fund Information
Alignment of Interest
These topics are covered in a series of short form and long form questions that are designed to help shape the direction of an LP’s diligence process. The ILPA DDQ also provides a list of requested documents and data points that would ideally be provided in any GP’s diligence package.
Included in this package are many of the frequently asked questions received during the ILPA DDQ’s comment period. For further questions contact the ILPA directly at +1-617-716-6500 or email@example.com.
ILPA Due Diligence Tool Frequently Asked Questions (FAQs)
1. What is the purpose of this document?
The ILPA’s goal is to reduce the administrative burden of LPs, GPs, Placement Agents and other third parties by providing a best-in-class due diligence questionnaire. Adoption will make questionnaire stage more efficient by minimizing the number of customized DDQs from LPs and consultants.
2. Is the industry required to use this document?
No, the ILPA understands that this document may not necessarily be applicable for all funds, or provide efficiencies for all parties. However, GPs that receive multiple questionnaires, with redundant and differently-organized questions, should see efficiencies in the diligence process.
3. How should GPs with funds for different strategies/geographies/industries (e.g. separate venture and growth funds) answer questions about the firm, and its funds and teams that aren’t currently fund raising? What level of information is relevant to LPs if they are only conducting diligence on a specific type of fund offered by a GP?
In these situations, the GP does not necessarily need to provide detailed information about business units that are materially unrelated to the Fund. (A simple overview of these non-related business units should be made available, however.) Unless specifically noted, any reference to the “Firm” in the ILPA DDQ should be focused on business units materially related to the Fund. GP’s should clearly state the business units being included and be able to explain their rationale for excluding others.
4. Are GP’s expected to provide answers to any “sensitive” questions in this document?
GP’s are not required to divulge sensitive information, especially if it violates any non-disclosure agreements with other parties. It is also understood that GPs may need to use caution in providing information to organizations they feel are not genuinely interested in committing to their fund. However, as fiduciaries, Limited Partners should not feel restricted from asking sensitive questions. The GP’s right to guard confidential information is no greater than the LP’s right to inquire about information they feel is relevant to the transparency and alignment of their potential partnership. If GPs are more comfortable with providing certain answers in person, in a redacted format or at a later stage in the diligence process, they should feel encouraged to do so. However, they should also provide an explanation for their rationale, as well as any further direction for LPs, in this document.
5. Are GPs expected to answer questions that are not applicable to their specific fund?
The ILPA DDQ is an attempt at a comprehensive questionnaire that applies to the majority of private equity funds. LPs should understand that not all questions are applicable to all GPs/funds. GPs should use their best judgment to only answer questions that are relevant to their organization. For skipped questions in the Detailed Questions section, GPs should provide a brief, one sentence statement explaining their rationale for not answering. For the skipped questions in the Basic Questions section, “N/A” should be populated in the “Reference” field.
6. Should LPs use a GP’s answers in the Basic Questions section (yes/no questions) as the sole criteria for their ultimate investment decision?
No, the basic questions are intended to provide LPs with a top-level checklist, and a framework to highlight issues that need further clarity. There may be extenuating circumstances that explain a particular “negative” answer. GPs should use the “Reference” field in the Basic Questions section to direct LPs to more expanded answers to these questions. LPs should review the expanded answers in the Detailed Questions section, as well as their own follow-up questions, before making any investment decisions.
7. Should LPs only use this document? In what format should additional questions be sent to the GP?
One of the goals of this document is to minimize, not eliminate, the variations in LPs’ diligence processes. While the ILPA believes that this is a comprehensive document that covers all of the questions that institutional investors should ask GPs, it may be necessary to supplement this document with additional questions. Additional questions should not be added to this document. To avoid any confusion, these questions should be listed in a separate document.
8. In various questions related to the Firm’s staff, the form references both “Principals” and “Team Members.” What is the difference between the two? For the purposes of this document, what criteria should a GP use to define each?
As referenced in Appendix B, “Team Members” refers to all Firm-personnel, including investment professionals and senior non-investment professionals that left the Firm in the last ten years. “Principals” refers to the Firm’s management team and other core members that have a significant contribution to the Firm’s direction and investment performance. The “Principal” designation should be made at the GP’s discretion. However, GPs should be prepared to answer any questions about their decision rationale.
9. Can GPs cite responses in their PPMs in the ILPA DDQ?
It is recommended that all answers should be contained in the questionnaire. Any relevant answer in the PPM should be copied into the DDQ to preserve the DDQ as a stand-alone document.
The document library contains all of the ILPA’s research papers, projects, presentations and sundry reviews as submitted by members, staff and validated third parties. ILPA members can search by keyword, title, author or event.
As well as undertaking its own projects and member surveys, the ILPA explores collaborative projects with Industry specialists that will increase value to our members. If you are interested in partnering with the ILPA, please contact us.