AIMA due diligence test revamped to include PE

The investment manager trade body has introduced standardized due diligence for private equity and debt managers for the first time.

A private equity- and private credit-specific module has been included in the latest version of a longstanding investor due diligence questionnaire for the first time.

The Alternative Investment Management Association’s template enables investors to assess managers as part of the fund allocation process. AIMA consulted with its private equity working group members for their contributions.

Also included are sections for investors to quiz managers on their vendors’ cybersecurity standards, responsible investment protocols, governance and operations.

The association said increasing complexity in investors’ manager assessments and the emergence of multi-strategy and multi-product firms prompted the changes to the questionnaire.

“Ever more investors are undertaking significant due diligence processes prior to making an investment,” said AIMA chief executive Jack Inglis. “Many alternative investment fund managers have transformed into diversified multi-strategy, multi-product firms seeking investments from a wide range of investors.”

The first AIMA DDQ was published in 1997 and was mostly geared to managing futures funds. It contained around 100 questions about the investment manager and the fund. Subsequent editions included more investment strategies and were updated to reflect changes to business practices and evolving regulations.