AAllocator DeskDiligence Memory

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Template

LP Due Diligence Checklist Template

A repeatable checklist for evaluating a private fund commitment from first read to IC decision - including the decision record itself.

What this template is for

Provides a consistent structure for LP-side due diligence so every fund opportunity is evaluated against the same set of questions, source documents, and decision points. Designed to be used start to finish on a new commitment or as a re-up audit.

When LP teams use it

  • First-look evaluation of a new GP relationship
  • Re-up decision on an existing manager
  • IC preparation for a private fund commitment
  • Annual diligence refresh on an active relationship

The template

Decision summary

Fill this in first as a working hypothesis, then revisit after diligence is complete.

  • Fund name, vintage, strategy, target size
  • Recommended commitment amount
  • New commitment or re-up
  • Recommendation: proceed / pause / decline
  • Primary reason to invest
  • Primary reason not to invest
  • Open diligence items
  • IC decision date
  • Owner and reviewer

Firm and strategy

  • Firm history, ownership, and economics
  • Strategy description and edge
  • Target fund size and current pipeline
  • Geographic and sector focus
  • Position concentration and diversification approach
  • Where this fund sits in the firm's product set

Team

  • Investment team biographies and tenure
  • Deal attribution per partner
  • Departures in the last five years and reasons
  • Carry split and economic alignment
  • Succession plan and key-person provisions
  • Recent hires and team expansion plan

Track record

  • Gross and net IRR, TVPI, DPI by fund
  • Loss ratio and distribution of outcomes
  • Realized vs. unrealized split
  • Attribution: which deals drove returns
  • Vintage performance vs. relevant benchmark
  • Mark-up history and valuation approach

Investment process

  • Sourcing channels and proprietary deal flow
  • Diligence and approval workflow
  • Portfolio construction guidelines
  • Reserve and follow-on policy
  • Value-creation playbook
  • Exit discipline and hold periods

Fund terms

  • Management fee and basis
  • Carry, hurdle, catch-up, and waterfall (American vs. European)
  • GP commitment
  • Fund term, extensions, and recycling
  • Key-person clause and removal rights
  • Side letter rights of interest (MFN, co-invest, fee, reporting)

Operational due diligence

  • Service providers (admin, audit, counsel, tax)
  • Valuation policy and pricing committee
  • Compliance program and CCO
  • Cybersecurity and business continuity
  • Insurance coverage (E&O, GP liability, cyber)
  • Past or pending litigation and regulatory matters

References

  • On-list LP references (three or more)
  • Off-list LP references developed through network
  • Portfolio company CEO references
  • Former employee references
  • Co-investor and lender references

ESG, mission, and policy considerations

Apply if relevant to your mandate or LP policy.

  • ESG policy and reporting framework, if applicable
  • Exclusions and screening, if applicable
  • Diversity reporting (firm and portfolio), if applicable
  • Climate or impact alignment, if applicable
  • Mission or policy constraints specific to the LP

Documents reviewed

Capture what the team actually read. The audit trail is as much about source material as it is about conclusions.

  • PPM
  • LPA
  • DDQ (ILPA or firm format)
  • Track record workbook
  • Quarterly letters (last 4-8 quarters)
  • Fund model
  • Side letter draft
  • Form ADV (Parts 1, 2A, 2B), if applicable
  • Audited financial statements
  • Valuation policy
  • Compliance manual
  • Reference call notes completed

Red flags and mitigants

List each material concern as its own row. Concerns without a mitigant should appear in Open items.

  • Identified concern
  • Severity: low / medium / high
  • Source of concern (document, reference, meeting)
  • GP explanation
  • LP team view
  • Mitigant
  • Follow-up owner
  • Status: open / monitoring / resolved

Re-up assessment, if applicable

  • What changed since the prior commitment?
  • Did the team do what they said they would do?
  • Has fund size increased materially?
  • Has strategy drifted?
  • Has the team changed?
  • Has performance quality improved or weakened?
  • What did we believe last time, and were we right?
  • Are we increasing, maintaining, reducing, or passing?

Open items and follow-ups

  • Outstanding diligence item
  • Owner
  • Source (GP, reference, third party, internal)
  • Required by date
  • Blocking for IC: yes / no
  • Resolution notes

Final IC recommendation

  • Recommendation: proceed / pause / decline
  • Recommended commitment size
  • Conditions or carve-outs
  • Key risks the LP is accepting
  • Monitoring plan post-commitment
  • IC date and decision
  • Dissenting views captured

Common mistakes

  • Treating the checklist as the deliverable instead of the decision record
  • Skipping off-list references because the on-list ones were strong
  • Letting the IC memo drift from the underlying diligence record
  • Treating ODD as a check-the-box rather than a separate workstream
  • Failing to document the rationale for unchecked items
  • Not capturing what the team decided NOT to verify, and why
  • Losing the link between source documents and the conclusions they support

How Allocator Desk manages this in a live system

  • Turns this checklist into a tracked diligence workflow per fund
  • Captures source documents and reviewer notes against each checklist item
  • Preserves the full reference call record and reviewer attribution
  • Logs red flags, mitigants, and open items with owners and status
  • Surfaces what is incomplete before the IC meeting, not after
  • Carries prior-commitment conclusions forward for re-up assessment