Glossary · Investors & Compliance
Due Diligence Questionnaire (DDQ)
A due diligence questionnaire (DDQ) is a structured set of questions that investors use to assess a fund manager’s strategy, operations, controls and governance.
Institutional investors and consultants issue a DDQ before investing and often update it periodically. Industry templates, such as those published by ILPA for private funds and AIMA for hedge funds, are widely used, alongside investors’ own questionnaires. Operational due diligence sections typically cover service providers, valuation, reconciliation, cash controls, AML, cybersecurity, business continuity and compliance.
A well-maintained DDQ shortens fundraising and demonstrates operational maturity. Answers must be consistent with the PPM, audited financial statements and what the manager actually does.
Pitfalls include outdated answers after a change in service provider or process, overstating controls that are not documented or evidenced, inconsistent answers across investors, and not having supporting documents, such as policies and SOC or ISO reports, ready to share. Many managers keep a master DDQ with version control and a named owner for each section, refreshed at least annually and whenever a material change occurs. This keeps answers consistent across investors and reduces the time needed to respond to new requests.
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