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The DDQ is a tool to assist investors when considering whether or not to invest with a hedge fund manager or in a hedge fund.
It was last revised in 2010 and AIMA said there was strong demand for an updated version to reflect regulatory changes since then, including the Alternative Investment Fund Managers Directive (AIFMD), which took effect in July, and other matters of interest to regulators such as dealing commissions and cyber security. AIMA consulted with a broad range of hedge fund managers and institutional investors during the drafting of the new DDQ and their input was integral to the new revisions.
Recognising the work required by managers to update to the revised DDQ, AIMA said it has taken care not to introduce changes without merit. While there are more than 90 new questions, many previous questions have been consolidated and overall the DDQ seeks to harmonise many of the expanded investor requirements for information. AIMA is also providing tools to help managers track where the new version differs from the previous one.
AIMA CEO Jack Inglis said: “The changes that have been made to the DDQ reflect not only the much altered regulatory landscape since the financial crisis, but also the significantly increased scope of the due diligence process that investors are pursuing today. The revision of this questionnaire would not have been possible without the guidance we received from manager members, service providers and investors. We would like to sincerely thank everyone who provided input, review and oversight in this process.”