This due diligence questionnaire (DDQ) has been developed to help investors better understand, evaluate and assess hedge fund managers’ approaches to responsible investment.
Asset owners and fund selectors can use the questions during the RFP process, manager monitoring, in client meetings, or in ongoing dialogue with hedge fund managers. The DDQ should not be considered in isolation, but rather used to support a wider information-gathering process.
The PRI encourages investors to:
- tailor the questions to suit their broader objectives;
- consider what additional resources are available to enhance their understanding of hedge fund managers’ answers; and
- engage with hedge fund managers to seek additional information and clarification, where necessary.
We recognise there are a multitude of hedge fund strategies and this DDQ does not cover all approaches. Asset owners and hedge fund managers may prefer to use some of the questions from the other asset class DDQs.
To promote consistency, this document is designed to complement the information gathered through the PRI’s Reporting Framework – particularly the hedge funds and policy, governance and strategy modules. It is also intended to be aligned with investment disclosure standards and frameworks developed by external organisations. The DDQ will be updated periodically to align with future changes to the Reporting Framework and other responsible investment practices.
We invite investors to supplement these hedge fund-related questions with those in our diversity, equity and inclusion (DEI) DDQ. Please contact [email protected] if you have questions or feedback.
Appendix 1 lists where questions in this DDQ map, either fully or partially, to indicators within the PRI 2024 Reporting and Assessment Framework.
Some questions in the DDQ focus on an organisation’s overarching approach to responsible investment, while others apply to the strategy level.
The DDQ provides guidance on the type of information each question is aiming to elicit. The PRI encourages investment managers to answer the question in a way that goes beyond these points.
Where relevant, we refer to the Reporting Framework glossary of key terms.
| Organisation-level responsible investment documents | Fund-level responsible investment documents |
|---|---|
|
☐ PRI transparency report ☐ Responsible investment policy ☐ Responsible investment reports ☐ Stewardship policy ☐ (Proxy) voting policy ☐ Impact investing report (relevant for allocators to impact strategies) ☐ Code of conduct ☐ Diversity, equity and inclusion policy ☐ Corporate social responsibility report (or similar) ☐ Whistleblower policy ☐ Other reports from voluntary initiatives such as Task Force on Climate-related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD) report. ☐ Relevant compliance policies covering – where relevant and available – market manipulation, treatment of material non-public information, use of expert networks and equal treatment of clients report |
☐ Examples of sustainability disclosures from fund(s) / investment vehicle(s) (e.g., SFDR disclosures) ☐ Examples of investment memos / research that covers sustainability and governance factors ☐ Any additional policies relating to sustainability matters ☐ Fund / vehicle-specific responsible investment policy ☐ (Proxy) voting records over a specified period ☐ Exclusion policy and exclusion list |
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