A DDQ (due diligence questionnaire) and a PPM (private placement memorandum) are the core documents through which LPs evaluate a fund before committing capital, and their quality shapes a GP’s credibility in the market. Accellency, drawing on a team of former IR heads, research analysts and institutional investors, sets out three recurring pitfalls GPs face when producing these documents in-house.
- 1What are the common pitfalls of producing a DDQ or PPM in-house?
- 2How does outsourcing DDQ and PPM production work?
Key Takeaways
• Producing DDQs and PPMs in-house exposes GPs to three recurring pitfalls: overloading a stretched IR team, recycling the last vintage’s materials, and underestimating rising LP expectations.
• Full or targeted outsourcing lets the IR team stay focused on investors while experts produce documents that reflect current market conditions and meet LP standards.
• Accellency produces DDQs and PPMs for GPs through full or targeted outsourcing, drawing on 200+ mandates across 8 alternative asset classes and 50+ clients managing $3.5tn in AUM.
“At Accellency, our Investor Relations practice offers strategic advisory and operational support to large GPs and growing platforms. As a trusted partner to internal IR, marketing, and product teams, we integrate seamlessly to relieve pressure on overstretched IR teams, providing expert assistance in producing DDQs and PPMs. We ensure your materials reflect current market conditions and meet evolving LP expectations.”
1What are the common pitfalls of producing a DDQ or PPM in-house?
1. Underestimating the disruption to your Investor Relations team
Even at well-established GPs, the investor relations team manages LP relationships, raises capital, and often oversees the fundraising deck, DDQ and PPM on top of that. As a fund launch approaches, the same team must prepare all the data-room documentation while running roadshows and investor meetings. Managing these demands at once diverts IR professionals from investors, and can delay the materials or reduce their quality.
“By outsourcing to Accellency, our IR team was able to focus on what they do best — engaging with investors and raising capital. It proved to be a highly valuable investment for us.”
2. Using a copy & paste approach from your previous vintage
GPs often over-rely on a “copy and paste” approach from the previous vintage. It seems efficient, but it fails to reflect the evolving market environment, shifting competitive dynamics and changing investor expectations. LPs also increasingly scrutinise how funds adapt and challenge the status quo. A fresh pair of eyes keeps each new vintage aligned with current market standards.
“A common mistake we see is that the macroeconomic environment, the market dynamics, and the investable landscape — key drivers of asset allocation for LPs — are not adequately addressed in DDQs and PPMs. These elements must be thoroughly covered to meet LPs’ expectations.”
3. Failing to realise that greater competition means higher LP expectations
In 2023, the most concentrated fundraising year in 15 years, the top 250 global players secured 80% of the capital raised, while the share going to everyone else fell from 34% to 19% since 2017, making it almost twice as hard for those GPs to raise capital. In this highly competitive environment, LPs expect a high level of institutionalisation, and that standard must show consistently across every document.
2How does outsourcing DDQ and PPM production work?
Accellency runs DDQ and PPM production as a structured, three-month process alongside the GP’s internal team, in four stages:
- Preliminary work (about one week). Review all existing documents and previous vintages, choose the DDQ format (ILPA, bespoke or hybrid), and identify every stakeholder who will provide data.
- Strategy review (about two weeks). Workshops with the investment team to capture key differentiators, investment opportunity, investable landscape and track record, and to identify any gaps in market intelligence.
- Production and iteration (six to ten weeks, depending on scope). Agree on the DDQ structure and question list, then draft and refine the document. Weekly meetings with the IR team and ongoing project management keep all stakeholders aligned.
- Final steps (about two weeks). Quality control for consistency, format and design, delivery of the final draft for client review, then sign-off.
FAQ
1. Can you create a DDQ or PPM from scratch for a new strategy if none exists?
Yes, we specialise in creating comprehensive DDQs and PPMs from the ground up, collaborating closely with your internal teams to capture your unique value proposition.
2. Can we opt for partial outsourcing rather than full production?
Yes. This allows you to outsource parts of the DDQ, such as the investment strategy or the market environment update, while producing other sections internally.
3. Do you assist in updating DDQs/PPMs to reflect changes in market conditions?
Absolutely. We provide targeted support to update your DDQs/PPMs, ensuring they stay current with evolving market trends and LP expectations.
4. How long does it take to produce a DDQ or PPM?
The timeframe depends on the project’s complexity and existing materials. Typically, it takes around 3 months, including workshops, production, and review.
5. Do you do market research?
Yes. We work with clients to define the scope and assess available data to meet your needs.
6. How do you work with our internal team?
We collaborate through weekly meetings, ensuring streamlined communication and alignment. We collect information via workshops, document reviews, and targeted questionnaires, staying in close contact to ensure accuracy and completeness.
7. Do you offer guidance on the type of DDQ to use, such as ILPA or other formats?
We offer recommendations on the most appropriate format for a DDQ. This will depend on your positioning and your LP base.
8. Do you handle the legal section of the DDQ?
No. While the DDQ is a critical marketing document, this section should be managed by your firm’s counsel.
9. How do you ensure confidentiality during the DDQ/PPM production process?
We follow strict confidentiality protocols, ensuring all sensitive information is handled with the highest level of security throughout the production process.
