Manager Due Diligence Report Template (IDD and ODD)
Allocator review of an external manager: firm, strategy, team, track record, risk, operations, compliance, cyber, ESG, fees, findings, conditions, own DDQ
사용법: Use it before hiring or re-approving an external investment manager. Fill the scope and the evidence log first, then rate investment and operational areas separately and turn every finding into a dated condition. The main pitfall is transcribing the manager's own questionnaire answers instead of verifying them with service providers and source data.
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Manager Due Diligence Report: [Manager name], [Strategy or fund name]
Combined investment and operational due diligence (IDD and ODD) report written by an allocator (pension fund, endowment, fund of funds, consultant, wealth platform or family office) before hiring or re-approving an external investment manager. It records scope, the firm, strategy, team, track record, risk management, operations, compliance and regulatory history, technology and cybersecurity, responsible investment, terms and fees, findings with a rating and conditions, a monitoring plan and an original question set. It supports the prudence duty of fiduciaries such as ERISA section 404(a)(1)(B) (29 U.S.C. 1104) and product governance by distributors, as of 2026-10. Topic coverage is comparable to industry questionnaires such as the ILPA Due Diligence Questionnaire (DDQ 2.0, November 2021) and the AIMA Illustrative DDQ (2025 edition), which this template neither reproduces nor adapts; obtain them from ilpa.org and aima.org. Replace every
[bracketed]value and every row marked Example. This is a document format, not financial, investment, legal or tax advice. Obtain the standard or law for the normative text.
Document control
| Field | Value |
|---|---|
| Document ID | [MDD-2026-014] |
| Manager (legal entity) | [Name] (Example: Kestrel Bay Capital) |
| Regulatory identifiers | [SEC file number / CRD / LEI / national register ID] |
| Product reviewed | [Fund, share class or separate account strategy] (Example: Kestrel Bay Global Credit Strategy, separate account) |
| Review type | [Initial / Annual re-review / Event-driven] |
| Proposed mandate size | [amount] (Example: USD 75m) |
| Version | [1.0] |
| Status | [Draft / IC-ready / Approved / Superseded] |
| Owner | [@lead-analyst] |
| Approvers/reviewers | [@head-of-manager-research], [@odd-lead], [@chief-risk-officer], [@legal] |
| Last updated | YYYY-MM-DD |
| On-site or virtual visit | YYYY-MM-DD, [location / video] |
| Data as of | YYYY-MM-DD |
| Classification | Confidential (contains manager confidential information under NDA dated YYYY-MM-DD) |
| Reviewer independence | [Statement that reviewers have no conflict with the manager, or the conflict and its mitigation] |
Approvals
| Role | Name | Decision | Date |
|---|---|---|---|
| Head of manager research (IDD) | [@name] | [Approve / Approve with conditions / Reject] | YYYY-MM-DD |
| ODD lead | [@name] | [Pass / Pass with conditions / Fail] | YYYY-MM-DD |
| Chief risk officer | [@name] | [Decision] | YYYY-MM-DD |
| Investment committee | [Minute reference] | [Decision] | YYYY-MM-DD |
Revision history
| Version | Date | Author | Change summary |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@name] | First draft after questionnaire review |
| 1.0 | YYYY-MM-DD | [@name] | Example: IC-ready after on-site visit and background checks |
| 1.1 | YYYY-MM-DD | [@name] | Example: Conditions C-02 and C-03 closed; rating confirmed |
Contents
- Scope, mandate and method
- Executive summary and rating
- Firm, ownership and stability
- Investment strategy and process
- Team and resources
- Track record and performance analysis
- Risk management
- Operations and service providers
- Compliance, regulatory history and conflicts
- Technology, cybersecurity and business continuity
- Responsible investment
- Terms, fees and alignment
- Findings, rating and conditions
- Monitoring plan
- Appendix A: Question set
- Appendix B: Evidence log
- Glossary and references
- Standard and licence note
1. Scope, mandate and method
| Item | Value |
|---|---|
| Portfolio role | [Allocation, sleeve and target weight] (Example: global credit sleeve, 5% of total portfolio, per IPS section [x]) |
| Benchmark | [Index name, currency, hedged or not] |
| Vehicle | [Commingled fund / separate account / fund of one] |
| Alternatives considered | [Managers screened and shortlisted, with the reason for this choice] |
| IDD depth | [Desk review / full review with on-site] |
| ODD depth | [Desk review / full review with on-site and service provider confirmations] |
| Out of scope | [For example tax structuring, reviewed by external counsel] |
Method used in this review:
- Screen the universe against the mandate criteria and record the shortlist.
- Send the question set in Appendix A and the document request list; receive the manager's own industry DDQ if available.
- Review public records: regulatory filings (for a US adviser, Form ADV Parts 1 and 2 on the SEC's Investment Adviser Public Disclosure site), court and sanctions searches, media.
- Analyse returns and holdings data independently (section 6).
- Hold meetings with the portfolio managers, the chief operating officer, the chief compliance officer and the head of risk, and observe at least one investment meeting where possible.
- Confirm assets, valuations and fees directly with the administrator, custodian and auditor.
- Score each area, record findings and conditions (section 13).
Record the depth actually achieved, not the depth planned. If the administrator would not confirm directly, or a key person was not available for interview, say so here and reflect it in the rating of the affected area.
2. Executive summary and rating
| Area | Rating | Key reason |
|---|---|---|
| Firm and stability Example | 3 Acceptable | Employee-owned, profitable, succession plan documented |
| Strategy and process Example | 4 Strong | Repeatable credit selection with documented sell discipline |
| Team Example | 3 Acceptable | Experienced lead PM; key person concentration in one analyst |
| Performance Example | 3 Acceptable | Net excess return 1.1% a year over five years, with low tracking error |
| Risk management Example | 3 Acceptable | Independent risk team; liquidity stress test monthly |
| Operations (ODD) Example | Pass with conditions | Manual reconciliation of OTC collateral (F-003) |
| Compliance (ODD) Example | Pass | No disciplinary events; annual review complete |
| Fees and terms Example | 3 Acceptable | Fee in line with peers after breakpoint |
| Overall Example | Recommend hire, with conditions C-01 to C-03 |
Rating scale for IDD areas: 1 Unacceptable, 2 Weak, 3 Acceptable, 4 Strong, 5 Exceptional. ODD uses Pass, Pass with conditions or Fail. Define each level in your manager research policy so that ratings are comparable across reviews.
3. Firm, ownership and stability
| Item | Finding | Evidence |
|---|---|---|
| Legal entities and domicile | [Entities, jurisdictions, regulators] | EV-001 |
| Ownership and control | [Owners and %; voting rights; minority stakes sold to third parties] | EV-002 |
| Assets under management, firm and strategy | [Five-year history, flows, client concentration] | EV-003 |
| Revenue and profitability | [Break-even AUM; dependence on performance fees] | EV-004 |
| Client concentration | [Largest client as % of strategy AUM] | EV-003 |
| Succession and key person plan | [Documented, tested, board-approved] | EV-005 |
| Material changes in last three years | [Mergers, departures, new businesses] | EV-006 |
Example: Kestrel Bay Capital is 82% owned by eleven employees and 18% by a passive minority investor with no board seat. Firm regulatory AUM is USD 2.48bn at 2025-12-31 (matching Form ADV Part 2A Item 4.E), of which the credit strategy is USD 1.55bn; the largest client is 9% of strategy AUM. The proposed USD 75m mandate would be 75 / 1,550 = 4.8% of strategy AUM, within the 5% limit in section 13.3. Management accounts show the firm covers fixed costs at about 60% of current revenue.
4. Investment strategy and process
Cover each step, with what you observed and what evidence supports it:
| Step | Description | Observed evidence | Assessment |
|---|---|---|---|
| Universe and screening | [Description] | [Screens, data sources] | [Assessment] |
| Research and idea generation | [Description] | [Sample research notes] | [Assessment] |
| Decision making | [Who decides, committee, vetoes] | [Minutes of [number] meetings] | [Assessment] |
| Portfolio construction | [Position limits, sizing method, diversification] | [Holdings history] | [Assessment] |
| Sell discipline | [Triggers, review cadence] | [Sold positions sample] | [Assessment] |
| Capacity | [Stated capacity and how derived] | [Liquidity analysis] | [Assessment] |
| Style drift controls | [Guidelines, pre-trade checks] | [Breach log] | [Assessment] |
State how the strategy behaved in at least two contrasting market regimes and whether the explanation the manager gives matches the attribution in section 6.
5. Team and resources
| Name or role | Responsibility | Years at firm | Years in industry | Co-investment | Background check |
|---|---|---|---|---|---|
| [Lead portfolio manager] | Final decision | [n] | [n] | [Yes / No, amount band] | [Clear / Findings] |
| [Co-portfolio manager] | [Responsibility] | [n] | [n] | [Band] | [Result] |
| [Head of research] | [Responsibility] | [n] | [n] | [Band] | [Result] |
| [Head of risk] | Independent risk oversight | [n] | [n] | [Band] | [Result] |
Record team turnover over five years (joiners, leavers, reasons), compensation structure (base, bonus, deferral, equity, link to long-term client returns) and the analyst coverage ratio. For each key person, state the contractual key person provision and what it triggers for clients.
6. Track record and performance analysis
6.1 Record integrity
| Check | Result |
|---|---|
| Composite or fund definition and inception date | [Result] |
| Claim of compliance with the GIPS® standards (2020 edition) and verification status | [Claimed, verified by [firm] to YYYY-MM-DD / not claimed] |
| Portability: was the record earned at a prior firm, and by the same team? | [Result] |
| Calculation method (time-weighted or money-weighted), fee basis (gross, net of actual or model fee) | [Result] |
| Reconciliation of a sample of monthly returns to administrator or custodian data | [Result, evidence ID] |
GIPS® is a registered trademark; where the report reproduces a
manager's GIPS claim, insert the notice required by its owner's
trademark guidelines (see Performance Composite Report,
finance/performance-composite-report). A manager's claim of
compliance is its own; this review does not make any firm compliant.
6.2 Returns and risk
Conventions: USD, net of the fee schedule in section 12, calendar years, annualised figures use geometric linking.
| Year | Strategy net Example | Benchmark Example | Excess Example |
|---|---|---|---|
| 2021 | 6.1% | 5.0% | 1.1% |
| 2022 | -3.4% | -5.2% | 1.8% |
| 2023 | 11.8% | 10.9% | 0.9% |
| 2024 | 8.0% | 7.1% | 0.9% |
| 2025 | 7.5% | 6.6% | 0.9% |
| 5-year annualised | 5.87% | 4.74% | 1.13% |
Annualised return over years from annual returns :
Strategy: 1.061 x 0.966 x 1.118 x 1.080 x 1.075 = 1.3304, so . Benchmark: 1.2603, so 4.74%.
Risk-adjusted measures, with risk-free rate , volatility , active return and tracking error (all annualised from monthly data):
| Measure | Strategy Example | Comment |
|---|---|---|
| Volatility (annualised) | 5.2% | From 60 monthly returns |
| Risk-free rate (average) | 2.8% | [Bill index name] |
| Sharpe ratio | 0.59 | (5.87 - 2.8) / 5.2 |
| Tracking error | 1.9% | Versus benchmark |
| Information ratio | 0.59 | 1.13 / 1.9 |
| Maximum drawdown | -6.9% | Peak 2021-12 to trough 2022-10 |
| Up / down capture | 104% / 82% | Versus benchmark |
6.3 Attribution and consistency
Explain where excess return came from (sector or issuer selection,
duration, curve, credit quality, currency, timing) using the manager's
attribution and your own holdings-based check. See Performance
Attribution Report (finance/performance-attribution-report) for
methods. Report rolling three-year excess returns and the share of
rolling periods with positive excess return; a record that depends on
one year deserves a lower rating.
7. Risk management
| Area | What to establish | Finding | Rating |
|---|---|---|---|
| Independence | Head of risk reports outside the investment team; can halt trading | [Finding] | [Rating] |
| Limits | Position, issuer, sector, country, duration, leverage, liquidity limits and breach handling | [Finding] | [Rating] |
| Measurement | Ex-ante tracking error, VaR, stress tests, factor exposures | [Finding] | [Rating] |
| Liquidity | Asset liquidity against redemption terms; stress test of large redemptions | [Finding] | [Rating] |
| Counterparty | Approval, exposure limits, collateral (ISDA and CSA terms) | [Finding] | [Rating] |
| Breach history | Breaches in the last three years and how they were resolved | [Finding] | [Rating] |
Example: Liquidity stress test assumes 25% of strategy AUM redeemed within one month; 71% of holdings can be sold within five trading days at no more than a 2% price impact under the manager's own model.
8. Operations and service providers
8.1 Trade lifecycle and controls
| Process | Control to verify | Finding |
|---|---|---|
| Order entry and pre-trade compliance | Automated checks against guidelines; hard and soft blocks | [Finding] |
| Execution and allocation | Allocation policy, fairness across accounts, trade errors log | [Finding] |
| Settlement and reconciliation | Daily cash and position reconciliation to custodian and prime broker | [Finding] |
| Cash movements | Dual authorisation, call-back verification, segregation from investment team | [Finding] |
| Valuation | Independent pricing, valuation committee, override log (see Valuation Policy, compliance/valuation-policy) | [Finding] |
| NAV and investor reporting | Administrator shadow check, error policy | [Finding] |
8.2 Service providers
| Role | Provider | Tenure | Independent confirmation received | Comment |
|---|---|---|---|---|
| Administrator | [Name] | [Years] | [Yes, YYYY-MM-DD / No] | [Comment] |
| Custodian or depositary | [Name] | [Years] | [Result] | [Comment] |
| Prime broker | [Name] | [Years] | [Result] | [Comment] |
| Auditor | [Name] | [Years] | [Result] | [Opinion type, any qualifications] |
| Legal counsel | [Name] | [Years] | [Not required] | |
| Pricing services | [Names] | [Years] | [Result] |
For a US private fund relying on the audit approach under the custody rule (17 CFR 275.206(4)-2(b)(4)), confirm the auditor is PCAOB-registered and inspected and that audited financial statements reach investors within 120 days of fiscal year end. For an EU alternative investment fund, confirm the depositary appointment (AIFMD Article 21) and whether valuation is performed by an external valuer or by the AIFM with functional independence (AIFMD Article 19(4)).
9. Compliance, regulatory history and conflicts
| Item | Finding | Evidence |
|---|---|---|
| Registrations and licences | [SEC registration, EU or UK authorisations, others] | EV-010 |
| Written compliance policies and annual review (for a US registered adviser, 17 CFR 275.206(4)-7) | [Date of last annual review; findings and remediation] | EV-011 |
| Chief compliance officer | [Name, reporting line, resources, other duties] | EV-012 |
| Code of ethics and personal trading | [Pre-clearance, holdings reporting, breaches] | EV-013 |
| Regulatory examinations and correspondence | [Dates, deficiency letters, responses] | EV-014 |
| Disciplinary history | [Form ADV disclosures, court and sanctions searches] | EV-015 |
| Conflicts of interest | [Side-by-side management, allocation, affiliated brokers, soft dollars, personal investments] | EV-016 |
| Marketing and performance presentation | [Policy and review process] | EV-017 |
| AML and sanctions | [Programme for investor onboarding; note: FinCEN's investment adviser AML rule has an effective date of 2028-01-01] | EV-018 |
Related templates: Annual Compliance Review
(compliance/annual-compliance-review), Investment Adviser Code of
Ethics (compliance/investment-adviser-code-of-ethics), Conflicts of
Interest Register (compliance/conflicts-of-interest-register), Form
ADV Part 2A Brochure (compliance/form-adv-part-2a-brochure).
10. Technology, cybersecurity and business continuity
| Area | What to establish | Finding |
|---|---|---|
| Governance | Owner of information security, board reporting, policies | [Finding] |
| Assurance | Independent assessments (penetration test, SOC 2 or ISO/IEC 27001 certification of key providers) and status of findings | [Finding] |
| Identity and access | MFA, privileged access, joiner and leaver process | [Finding] |
| Customer information | Programme under applicable privacy rules (for US advisers, Regulation S-P as amended, compliance required since 2025-12-03 for larger and 2026-06-03 for smaller entities) | [Finding] |
| Incident response | Plan, last test, client notification commitments | [Finding] |
| Business continuity | Plan, last test date, recovery time for trading and reporting | [Finding] |
| Third-party dependency | Critical vendors and concentration (order management, data, cloud) | [Finding] |
| AI and model use | Use of AI or quantitative models in research or trading, and their governance | [Finding] |
11. Responsible investment
| Item | Finding |
|---|---|
| Policy and governance | [Policy date, owner, oversight] |
| Integration into process | [Where ESG data enters research and sizing; examples of decisions changed] |
| Stewardship and engagement | [Engagement log, escalation, voting where relevant] |
| Exclusions | [List and how enforced pre-trade] |
| Product classification | [For EU products: SFDR Article 6, 8 or 9 under Regulation (EU) 2019/2088 as in force; SFDR 2.0 (Commission proposal COM(2025) 841) is a proposal and not law as of 2026-10: the European Parliament and the Council have adopted their negotiating positions and trilogue negotiations are under way; check the current status] |
| Reporting and data | [Metrics, coverage, estimation] |
| Fit with allocator policy | [Fit with Responsible Investment Policy, finance/responsible-investment-policy] |
12. Terms, fees and alignment
| Term | Proposed | Peer median Example | Comment |
|---|---|---|---|
| Management fee Example | 0.45% on first USD 50m, 0.35% above | 0.42% | Breakpoint negotiated |
| Performance fee | [None / rate, hurdle, high-water mark] | ||
| Pass-through expenses | [List and cap] | ||
| Liquidity | [Daily / monthly; notice; gates] | ||
| Most-favoured-nation clause | [Yes / No] | ||
| Key person and termination rights | [Terms] | ||
| Manager co-investment | [Amount band] |
Example fee calculation for a USD 75m mandate: 0.45% x 50m = USD 225,000; 0.35% x 25m = USD 87,500; total USD 312,500 a year, an effective rate of 312,500 / 75,000,000 = 0.417%.
Restate the five-year net return in section 6.2 using this fee schedule if the published net figures used a different fee.
13. Findings, rating and conditions
13.1 Findings register
| ID | Area | Finding | Severity | Manager response | Status |
|---|---|---|---|---|---|
| F-001 Example | Team | One analyst covers 40% of holdings by value; no documented back-up | Medium | Hiring second analyst by 2027-03-31 | Open |
| F-002 Example | Performance | 2021 to 2022 returns use a model fee higher than the actual fee charged; net returns correct but labelled inconsistently | Low | Factsheet corrected | Closed |
| F-003 Example | Operations | OTC collateral reconciled manually in a spreadsheet, single preparer | High | Move to administrator's collateral module with four-eyes review | Open |
| F-004 Example | Cybersecurity | Penetration test 14 months old | Medium | New test scheduled 2026-11 | Open |
Severity: High (must be fixed before funding or blocks hire), Medium (condition with a date), Low (observation).
13.2 Conditions
| ID | Condition | Linked finding | Due | Verified by |
|---|---|---|---|---|
| C-01 Example | Evidence that collateral reconciliation runs in the administrator system with review | F-003 | Before funding | ODD lead |
| C-02 Example | Penetration test report with no open critical findings | F-004 | 2027-01-31 | ODD lead |
| C-03 Example | Key person clause naming the lead PM and head of research in the investment management agreement | F-001 | Before signing | Legal |
13.3 Recommendation
State the recommendation (hire, hire with conditions, watch, reject), the mandate size, any limit on allocation as a share of the manager's strategy AUM (Example: our assets no more than 5% of strategy AUM) and the date of the next review.
13.4 Writing findings and reviewing the report
Write each finding so that the investment committee can understand the risk without reading the rest of the report: state the condition you observed, the standard you expected, the evidence ID, the effect on the mandate if it is not fixed, and the manager's response. Avoid adjectives such as "robust" or "weak" without the fact behind them.
Rate severity from the effect on the allocator's clients, not from how hard the fix is. A single-preparer reconciliation of collateral (F-003) is High because an undetected break could misstate the account value and the collateral the client relies on; a stale penetration test (F-004) is Medium because the control exists but its assurance is out of date.
Before the report goes to the investment committee, a reviewer who did not take part in the diligence checks that:
- every rating in section 2 matches the findings and evidence in the later sections, and no area is rated without evidence;
- the performance figures were recomputed from source data, use the fee schedule the allocator would pay and compare like with like (currency, gross or net, benchmark hedging);
- service provider confirmations were received directly from the provider, not forwarded by the manager;
- the ODD outcome is shown separately and was not averaged into the investment rating;
- the proposed mandate respects the concentration limit in section 13.3 (in the example, USD 75m is 4.8% of the USD 1.55bn strategy); and
- each condition has an owner on both sides and a date, and the funding instruction cannot be released before the "before funding" conditions are verified.
Common errors in practice: accepting the manager's DDQ answers as evidence; leaving the background checks to the end, so that a finding arrives after the committee has met; and re-using the prior year's report text without re-testing the areas it describes. A re-review should show what changed since the last report and close or re-open each earlier finding explicitly.
14. Monitoring plan
| Item | Frequency | Source | Trigger for event-driven review |
|---|---|---|---|
| Performance and attribution | Monthly / quarterly | Manager report, custodian data | Underperformance of more than [x]% over [period] |
| Holdings and guideline compliance | Monthly | Custodian | Any unresolved breach |
| Team changes | As notified, confirmed quarterly | Manager | Departure of a key person |
| Firm ownership and AUM | Quarterly | Manager, Form ADV | Change of control; AUM drop over [x]% |
| Compliance and regulatory events | Annual and as notified | Manager, public records | Any enforcement action |
| ODD re-review | Every [2] years or on trigger | ODD team | Service provider change |
15. Appendix A: Question set
| ID | Question | Section |
|---|---|---|
| Q-FIRM-01 | List every owner with more than 5% economic or voting interest and any arrangement that could change control. | 3 |
| Q-FIRM-02 | At what AUM does the firm cover its fixed costs, and what share of revenue comes from performance fees? | 3 |
| Q-FIRM-03 | Describe the succession plan for each founder or key person and when it was last reviewed by the board. | 3 |
| Q-STRAT-01 | Describe one recent buy and one recent sell decision, from first idea to execution, with dates and participants. | 4 |
| Q-STRAT-02 | How was the stated strategy capacity derived, and what would you do on reaching it? | 4 |
| Q-TEAM-01 | List all investment staff who joined or left in the last five years and the reason for each departure. | 5 |
| Q-TEAM-02 | How is variable pay determined for portfolio managers, and how much is deferred or invested in the strategy? | 5 |
| Q-PERF-01 | Provide monthly gross and net returns since inception, with the fee basis, and the custodian data to reconcile them. | 6 |
| Q-PERF-02 | Which periods or positions explain most of the excess return? | 6 |
| Q-RISK-01 | List every limit breach in the last three years, how it was detected and how it was resolved. | 7 |
| Q-RISK-02 | Describe the liquidity stress test and its latest results. | 7 |
| Q-OPS-01 | Map the trade lifecycle and name who can move cash, with the controls on each payment. | 8 |
| Q-OPS-02 | Authorise us to contact your administrator, custodian and auditor directly. | 8 |
| Q-OPS-03 | List all NAV or pricing errors in the last three years and the compensation paid. | 8 |
| Q-COMP-01 | Provide the last annual compliance review summary and status of its findings. | 9 |
| Q-COMP-02 | List all regulatory examinations, inquiries and litigation in the last ten years. | 9 |
| Q-COMP-03 | How are investment opportunities allocated between accounts with different fee arrangements? | 9 |
| Q-TECH-01 | Provide the latest independent security assessment summary and the status of its findings. | 10 |
| Q-TECH-02 | When was the business continuity plan last tested, and what failed? | 10 |
| Q-RI-01 | Give two examples where ESG analysis changed an investment decision. | 11 |
| Q-TERMS-01 | List all expenses charged to clients or the fund in the last fiscal year as a percentage of AUM. | 12 |
16. Appendix B: Evidence log
| Evidence ID | Description | Source | Date received | Retained / viewed only |
|---|---|---|---|---|
| EV-001 Example | Organisation chart and legal entity structure | Manager | 2026-08-22 | Retained |
| EV-011 Example | Annual compliance review summary 2025 | Manager | 2026-08-29 | Viewed on site only |
| EV-020 Example | Administrator confirmation of AUM and NAV process | Administrator | 2026-09-15 | Retained |
| EV-021 Example | Background check report on four key persons | [Screening provider] | 2026-09-18 | Retained |
Traceability check: every finding and rating in sections 3 to 12 cites an evidence ID (add an Evidence column to any table that lacks one), every finding in section 13 cites the section it came from, and every condition cites a finding.
17. Glossary and references
| Term | Meaning |
|---|---|
| IDD | Investment due diligence: strategy, team, process and performance |
| ODD | Operational due diligence: operations, controls, compliance and service providers |
| DDQ | Due diligence questionnaire |
| AUM | Assets under management |
| Tracking error | Annualised standard deviation of active returns |
| Information ratio | Active return divided by tracking error |
| Key person clause | Contract term giving clients rights if named individuals leave |
| Audit approach | Custody rule alternative for pooled vehicles based on annual audited financial statements |
References (obtain current versions):
- Employee Retirement Income Security Act of 1974, section 404(a) (29 U.S.C. 1104(a)), fiduciary duties.
- 17 CFR 275.206(4)-7 (compliance procedures and practices) and 17 CFR 275.206(4)-2 (custody), eCFR.
- Directive 2011/61/EU (AIFMD), Articles 19 and 21, EUR-Lex.
- Regulation (EU) 2019/2088 (SFDR), EUR-Lex.
- ILPA Due Diligence Questionnaire 2.0 (November 2021) and AIMA Illustrative DDQ for Investment Managers (2025 edition): names only.
- GIPS standards, 2020 edition (name only).
- Related templates: Investment Committee Memo (
finance/investment-committee-memo), Investment Policy Statement (Institutional) (finance/investment-policy-statement-institutional), Performance Composite Report (finance/performance-composite-report), Valuation Policy (compliance/valuation-policy), Due Diligence Request List (finance/due-diligence-request-list).
Standard and licence note
Based on public law cited by section number: ERISA section 404(a) and SEC rules in 17 CFR Part 275 (US government works) and EU legislation from EUR-Lex (reuse with acknowledgement under Commission Decision 2011/833/EU). Structure aligned with common allocator practice for investment and operational due diligence. The ILPA DDQ 2.0, the AIMA Illustrative DDQ and the GIPS standards are cited by name only; no question, wording, ordering or layout from them is reproduced or adapted, and the question set in Appendix A is original. GIPS® is a registered trademark of its owner; insert the notice its trademark guidelines require where a GIPS claim is shown. This template is not affiliated with or endorsed by ILPA, AIMA, the GIPS standards owner or any regulator. All names and figures in the examples are fictional. This template is original text written for this collection. Check the current official versions before use. Template licence: MIT.
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