Due Diligence Questionnaire and Diversity Metrics Template

ILPA's DDQ 2.0 and Diversity Metrics Template are NOW Available!

The ILPA DDQ and Diversity Metrics Template are intended to standardize the key areas of inquiry posed by investors during their diligence of managers and to provide a framework for ongoing monitoring of progress related to DEI.

To meaningfully update the ILPA DDQ and Diversity Metrics Template to reflect private markets today and to help the industry take a step forward in diligence, ILPA updated both documents throughout 2021. The final revised documents benefit from input that ILPA sourced from a public comment period, discussions with LPs, GPs and other industry bodies and targeted working groups and roundtables.

Questions or feedback may be directed to DDQFeedback@ilpa.org.

 

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The updates to the ILPA DDQ were made with a keen eye towards addressing the emerging areas of inquiry undertaken by LPs in their diligence processes and to ensure that the DDQ aligns with ILPA guidance released over the last several years. The Summary of Changes document highlights the changes found in the  ILPA DDQ 2.0.

In doing so, the ILPA DDQ aims to help LPs, GPs and other interested parties operate more efficiently and effectively by standardizing the most frequent and important diligence questions posed by investors of managers.

The ILPA DDQ was first introduced in 2013; subsequent updates were made in 2016 focused on reporting in concert with the ILPA Reporting Template and reflecting PRI’s LP Responsible Investment DDQ as the ESG section. In 2018, the DDQ was updated with the introduction of a section dedicated to questions and requested documents on DEI.

The private markets industry has changed significantly since 2013, which prompted ILPA to update the DDQ to modernize the document. As the industry has meaningfully evolved, ILPA seeks to ensure that the DDQ reflects emerging practices and norms, as well as transformation in technology, operating processes and industry best practices, all while maintaining a core focus on improving transparency, governance and alignment of interest between GPs and LPs.

 

Given continued industry focus on ESG and DEI, ILPA has adapted the DDQ to reflect these changes as follows:

ESG:

The updated ESG section in the ILPA DDQ 2.0 draws on an updated version of the PRI Limited Partners Private Equity Responsible Investment DDQ. We are delighted to work closely once again with the PRI to incorporate their latest materials into the ILPA DDQ. The synchronization of the ILPA and PRI questionnaires offers opportunities for efficiency and standardization. Click here to read more about the update process for PRI and view the user guide for PRI’s Limited Partners Private Equity Responsible Investment DDQ here.

DEI:

The updated DEI section within the ILPA DDQ 2.0 includes several enhancements that align with prevalent areas of LP inquiry specific to DEI. Similarly, the developments to the ILPA Diversity Metrics Template reflect information sought by LPs, as well as information increasingly requested by LPs of GPs, informed by signatories to the Diversity in Action initiative, validated through multiple working groups and round tables focused on diversity metrics and aligned with ILPA’s recently released ESG Assessment Framework.

The ILPA Diversity Metrics Template seeks to improve upon the initial version released in 2018. The updated version features several notable enhancements, including more globally relevant designations for race and ethnicity, more inclusive information on gender/diversity by adding a nonbinary designation and additional diversity designations, simplified structure for role designations across ownership and professionals, insight into staff movement and select portfolio company-level data.

ILPA has worked closely with FCLTGlobal to align ILPA’s Diversity Metrics Template with FCLTGlobal’s template used to track diversity for boards of private companies.

In addition to robust discussions and feedback from LPs, GPs, and other interested parties, the ILPA DDQ leverages insight produced from the following efforts since 2013:

ILPA recognizes that the ILPA DDQ as written best aligns with established private equity managers. To better serve the private markets industry as a whole, ILPA is in the process of developing modules of the ILPA DDQ, in coordination with other leading industry bodies, tailored to different asset classes such as real estate, private credit and infrastructure, as well as to small and emerging managers.

Additionally, ILPA will institute a periodic review of the ILPA DDQ to better align with key developments as our industry evolves. While no concrete review timeline in specified, it is expected that future updates will take place on a more regular cadence, eliminating the need for comprehensive updates over long intervals.