Template

Private Equity Fund Due Diligence Checklist

A buyout and growth-equity diligence checklist tuned for the specifics that matter in PE.

What this template is for

Adapts the general LP diligence checklist for the questions that matter most in private equity: deal attribution, value creation, leverage, exit discipline, continuation vehicles, and whether the GP's claimed edge actually shows up in realized outcomes.

When LP teams use it

First-look on a PE buyout or growth fund
Re-up evaluation for a PE manager
IC preparation for a PE commitment
Lower-middle-market manager evaluation
Growth equity manager evaluation
Continuation vehicle or GP-led secondary review

The template

Strategy specifics

Buyout vs. growth vs. hybrid
Control vs. minority orientation
Check size range and target enterprise value
Sector focus and depth of sector expertise
Geographic focus
Sponsor vs. sponsor-less deal mix
Platform-plus-add-on strategy, if applicable
Founder-owned / family-owned / corporate carve-out focus, if applicable
Where this fund sits in the firm's product set
What makes this strategy hard to replicate
Where the strategy is most crowded

Portfolio fit

Role this manager would play in our portfolio
Existing exposure to this GP or related strategy
Overlap with current PE managers
Vintage-year exposure context
Sector or geography concentration created by this commitment
Expected commitment size and rationale
Expected pacing impact
What the portfolio loses if we pass
What risk the portfolio takes if we commit
Re-up view: increase / maintain / reduce / pass / undecided, if applicable

Deal sourcing and conversion

Proprietary vs. intermediated deal flow
Pipeline size relative to actual investments
Win rate and pricing discipline
Bilateral vs. auction process mix
Source of best deals in prior funds
Evidence that sourcing advantage is repeatable
Repeat seller, executive, or founder relationships
Use of intermediaries and banker relationships
Lost deals and why the GP lost them
Deals passed on and why
Pricing discipline in competitive processes

Team and deal attribution

Partner-by-partner deal attribution
Who sourced each major winner
Who led diligence and execution
Who sits on boards and drives value creation
Key-person dependency by deal and sector
Departures in the last five years and deal impact
Carry allocation and economic alignment
Succession plan
Junior team retention and promotion history
Operating partner involvement by deal

Value creation

100-day plan template and execution record
Operating partner bench and engagement model
Internal vs. external operating resources
Multiple expansion vs. EBITDA growth attribution
Revenue growth attribution
Margin improvement attribution
Add-on M&A track record
Pricing power and revenue growth in portfolio
Management team upgrade history
Board-level involvement by GP
Evidence that value creation claims match actual outcomes
Examples where the value creation plan failed

Leverage and capital structure

Average leverage at entry vs. peers
Entry leverage by deal and fund
Use of subscription lines
Use of NAV facilities
Use of portfolio company debt refinancing
Interest coverage and covenant cushion
Floating-rate exposure
Stress case under higher rates or lower EBITDA
Equity cushion at entry
Refinancing track record
Dividend recap history
How leverage contributed to returns

Performance attribution

Gross and net IRR, TVPI, DPI by fund
Top-deal concentration of returns
Loss ratio at deal level
Realized vs. unrealized split per fund
Vintage comparison vs. PE-specific benchmarks
MOIC distribution by deal
Realized winners vs. marked winners
Attribution by partner
Attribution by sector
Attribution by source of deal
Attribution by value creation lever
Deals that drove most of the carry
Performance excluding the top one or two deals

Exits and realization discipline

Strategic vs. sponsor vs. IPO exit mix
Average hold period
Recent exit multiples vs. entry multiples
Exit timing discipline
Partial exits and continuation of exposure
Realization pace vs. prior underwriting
Pending exits and dependency on market window
Continuation vehicle history and policy
GP-led secondary process history
Use of stapled commitments or rollover economics
LP consent process for continuation vehicles
Evidence that exit timing was driven by discipline rather than fundraising needs

Terms specific to PE

Management fee rate and basis
Transaction and monitoring fee offset
Carry, hurdle, catch-up, and waterfall
GP commitment
Fund term and extension rights
Recycling provisions
Subscription facility terms and reporting
NAV facility permissions
Continuation vehicle consent rights and process
Key-person provisions
Removal and suspension rights
Co-investment rights and allocation policy
MFN rights
Reporting rights
Any terms that deviate from market

Operational due diligence

Fund administrator
Auditor
Counsel
Tax advisor
Valuation policy
Valuation committee composition
Compliance program and CCO
Cybersecurity and business continuity
Portfolio company data collection process
Conflicts policy
Co-invest allocation policy
Continuation vehicle conflict process
Past or pending litigation, regulatory, or compliance matters
Insurance coverage

References

On-list LP references
Off-list LP references
Portfolio company CEO references
Former employee references
Co-investor references
Lender references
Intermediary or banker references
Operating partner references
Reference feedback on difficult situations
Reference feedback on communication quality
Reference feedback on discipline during competitive processes
Reference feedback on how the GP behaves when a deal underperforms

Re-up specific questions, if applicable

What changed since our last commitment?
Did the GP do what we expected them to do?
Did the prior fund perform for the reasons we underwrote?
Has fund size increased materially?
Has strategy drifted?
Has the team changed?
Have terms changed?
Have marks become more or less credible?
Did the GP communicate well through stress?
What did we believe last time, and were we right?
Should we increase, maintain, reduce, or pass?
What would make us not re-up?

Red flags and mitigants

Fund size growing faster than opportunity set
Returns concentrated in one deal or one partner
Heavy reliance on unrealized marks
Value creation claims not supported by deal-level attribution
Operating partners used more in marketing than in practice
Increasing leverage or aggressive refinancing
Strategy drift into larger, more competitive deals
Key-person dependency on one senior partner
Weak DPI despite strong headline TVPI
Continuation vehicle used to defer realization pressure
Subscription line boosting headline IRR
Terms moving against LPs without clear justification
Identified concern
Severity: low / medium / high
GP explanation
LP team view
Mitigant
Follow-up owner
Status

Final diligence conclusion

One-paragraph investment view
Primary reason to invest
Primary reason not to invest
Biggest underwriting 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 headline IRR without understanding subscription-line impact
Underweighting operating-partner reality vs. marketing
Failing to test 100-day plans against actual portfolio outcomes
Not asking about continuation vehicles before they become a problem
Treating loss ratio as a single number rather than a distribution
Accepting value creation claims without deal-level attribution
Ignoring fund size growth because prior funds performed well
Overweighting unrealized TVPI when DPI is thin
Missing partner-level attribution and key-person dependency
Treating a re-up like a fresh diligence process instead of a delta decision

How Allocator Desk manages this in a live system

Creates a standardized PE diligence workflow with attribution, leverage, terms, and value-creation fields
Tracks 100-day plan claims, operating initiatives, and quarterly outcomes against the original diligence record
Surfaces subscription-line, NAV facility, recycling, and continuation-vehicle issues before IC
Connects PE-specific terms to the side letter obligations record
Links references, quarterly monitoring, annual meeting notes, and prior IC memos into the re-up decision
Preserves deal-level attribution, red flags, mitigants, and reviewer conclusions for the next vintage
Turns PE diligence from a static checklist into a searchable record of investment judgment over time