Template

Emerging Manager Due Diligence Checklist

A first-time or second-fund manager checklist that takes attribution, firm build, operational readiness, and sustainability seriously.

What this template is for

Emerging managers require more rigor on attribution, firm-build risk, operational readiness, and firm sustainability, not less. This checklist focuses on the questions that often get skipped in early-fund excitement: did the team really generate the prior track record, can the firm survive long enough to execute the strategy, and are the economics aligned for the next fund?

When LP teams use it

First-time fund evaluation
Second-fund evaluation where Fund I is still maturing
Anchor LP discussions
Seed investor discussions
Spin-out manager evaluation
Team lift-out evaluation
Re-up evaluation for Fund II or Fund III
IC preparation for an emerging manager commitment

The template

Manager and fund overview

Manager name
Fund name and vintage
First-time, second-fund, spin-out, or team lift-out
Strategy
Target fund size and hard cap
First close date and final close target
Existing capital raised
Anchor LPs, if any
Seed investor, if any
Recommended commitment amount
Recommended status: proceed / proceed with conditions / defer / pass
Lead analyst and reviewing partner or senior approver

Attribution and prior track record

Verified attribution from prior firm, with permission if required
Deal-by-deal attribution
Lead vs. co-lead vs. supporting role per deal
Who sourced each cited deal
Who led diligence and execution
Who sat on the board
Who drove value creation or follow-on decisions
Performance of cited deals vs. firm-wide returns at prior firm
Realized vs. unrealized split on cited track record
Marks vs. realized outcomes
Attribution by partner
Attribution by strategy, sector, or stage
Deals excluded from the presented track record and why
Reference calls with prior firm partners, if appropriate
Reference calls with co-investors, founders, CEOs, lenders, or operators
Confidence level in attribution: high / medium / low

Team and firm build

Founding team members
Prior working relationship among founders
Length of time working together
Decision-making history together
Founding team chemistry
Partner roles and responsibilities
Investment committee structure
Dissent and conflict-resolution process
Hiring plan and pace
Required hires before and after final close
Carry and economic alignment among partners
Management company ownership
Succession, key-person depth, and key-person provisions
Junior team plan
Advisor or venture partner model, if applicable
Office, systems, and infrastructure plan
What happens if one founder leaves

Strategy and edge

Strategy fit with the team's prior experience
Where the edge is differentiated vs. incumbent funds
Why this team should win deals without the prior firm's brand
Target company, borrower, asset, or manager profile
Target check size
Target ownership or influence, if applicable
Sector, geographic, stage, size, or complexity focus
Evidence that the strategy is repeatable
Evidence that the opportunity set is large enough
Where the strategy is most crowded
What market environment would make this strategy struggle
What the team will not do

Sourcing and pipeline

Pipeline visibility
Current actionable pipeline
Deals or opportunities already under LOI, signed, warehoused, or pre-committed
Sourcing channels
Proprietary sourcing evidence
Network dependence on prior firm brand
Intermediary reliance
Repeat founder, executive, sponsor, operator, lender, or broker relationships
Inbound vs. outbound mix
Win rate history, if available
Deals already passed on and why
Capacity to deploy at target fund size
Risk of over-deployment after final close
Pipeline quality vs. fundraising pressure

Fund size and portfolio construction

Target fund size vs. demonstrated opportunity set
Minimum viable fund size
Hard cap discipline
Number of expected investments
Expected initial check size
Reserve or follow-on policy
Concentration limits and maximum exposure per position
Diversification by sector, geography, stage, or asset type
Expected pacing
Recycling assumptions
Co-investment or SPV usage
What has to be true for this fund size to work
What happens if the fund closes below target
What happens if the fund closes at the hard cap

Operational due diligence readiness

Fund administrator, auditor, counsel, and tax advisor selected
Compliance and CCO arrangements
Valuation policy and committee or approval process
Capital call and distribution process
Investor reporting process
Cybersecurity and business continuity
Document management process
Conflicts, allocation, and co-investment allocation policy
Personal trading or investment policy
Insurance coverage
Budget for finance, compliance, and operations
Back-office responsibilities by person
Any operational gaps before first close

Management company economics and sustainability

Management fee structure
Expected annual management fee revenue
Management company budget
Partner compensation plan
Hiring, office, technology, legal, accounting, compliance, and travel budget
Expected cash burn
Break-even AUM or fee revenue
Partner capital commitment funding source
GP commitment amount and financing, if any
Outside seed economics, if any
Revenue sharing or GP stake arrangements
Path to sustainability if fundraising is below target
Path to Fund II given expected outcomes for Fund I
Ability to support the platform through a slow fundraising cycle
Risk that economics force premature fundraising or strategy drift

Anchor and seed terms

Anchor LP identity, if disclosed
Seed investor identity, if applicable
Discount or rebate structure
Fee break duration
Carry discount or economics
Revenue share or GP stake participation
Advisory board seat
Information rights enhancements
Capacity rights for future funds
Most-favored-nation implications
Co-investment rights
Governance, veto, key-person, or removal rights
Side letter rights
Potential conflicts with other LPs
Terms that may disadvantage later LPs
Terms that should be captured in the obligations tracker

Investment process and governance

Investment committee composition
Decision rights
Unanimous vs. majority approval
Founder veto rights
Diligence process
Approval or investment memos
Portfolio monitoring cadence
Exit or realization process
Risk management process
Use of outside advisors
How dissent is documented
How conflicts are escalated
How lessons from early deals are captured
How process differs from the prior firm

References

Prior firm partner references
Former colleague references
Founder, CEO, borrower, operator, or portfolio company references
Co-investor references
LP references, if any
Service provider references
Lender, banker, broker, or intermediary references
Feedback on attribution, judgment, work ethic, and durability
Feedback on team chemistry, integrity, and transparency
Feedback on ability to operate without prior firm infrastructure
Off-list references developed by the LP team

Fund I or early portfolio review, if applicable

Investments completed to date
Warehoused investments
Initial portfolio fit with stated strategy
Entry pricing or valuation discipline
Early marks and valuation support
Early operating or performance signals
Capital deployment pace
Reserve usage
Any deviations from stated strategy
Any concentration concerns
Any early write-downs or impairments
Any conflicts or allocation issues
Lessons learned from early investments
Does the early portfolio support the Fund II story

Fund II or re-up questions, if applicable

What changed since Fund I
Did the team execute the strategy it promised
Did the team hire as planned
Did operations mature as planned
Did the manager stay disciplined on fund size
Did Fund I deployment match the original pacing plan
Did early performance come from the intended thesis
Are marks supported by evidence
Has the team improved sourcing access
Has the firm become more institutional without losing edge
Has strategy drifted
Should we increase, maintain, reduce, or pass
What would make us not re-up

Red flags and mitigants

Prior track record not clearly attributable
Team has not worked together through stress
Fund size too large for demonstrated sourcing capacity
Management company economics too thin to support the platform
Anchor terms create conflicts with later LPs
Seed economics reduce long-term alignment
Operational infrastructure not ready for institutional capital
Compliance ownership unclear
Valuation process underdeveloped
Key-person dependency on one founder
Hiring plan unrealistic
Fundraising pressure driving investment pace
Strategy relies too heavily on prior firm brand
No credible path to Fund II
Early deals do not match stated strategy
For each: severity, manager explanation, LP team view, mitigant, owner, status

Final diligence conclusion

One-paragraph investment view
Primary reason to invest
Primary reason not to invest
Biggest attribution question
Biggest firm-build question
Biggest operational readiness question
Open diligence items
Recommended commitment size
Recommendation: proceed / proceed with conditions / defer / pass
Conditions to close
Items to monitor after commitment
Reviewer confidence level

Common mistakes

Crediting prior firm performance without attribution diligence
Underweighting firm-build risk vs. investment strategy
Treating anchor discounts as the whole reason to commit
Skipping ODD because the team is too small to have problems yet
Failing to map a credible path to Fund II
Ignoring management company economics and team sustainability
Overlooking how much of the edge came from the prior firm's brand
Accepting 'we worked together before' without testing decision-making under stress
Missing conflicts created by seed or anchor economics
Letting excitement about access substitute for evidence of repeatable sourcing
Failing to document what milestones must be met after commitment

How Allocator Desk manages this in a live system

Creates an emerging manager diligence workflow with attribution, firm-build, ODD-readiness, and sustainability fields
Captures anchor, seed, capacity, side letter, and information rights in the obligations record
Tracks firm-build milestones such as hires, service providers, compliance readiness, early portfolio construction, and Fund II path over time
Preserves verified attribution, reference calls, early portfolio notes, IC memos, and re-up views in one manager record
Surfaces whether the manager is meeting the milestones the LP underwrote at commitment
Connects emerging manager coverage across the portfolio so patterns, risks, and successful traits are visible over time
Turns emerging manager diligence from a story about talent into a searchable record of attribution, readiness, and institutional durability