Private Markets Due Diligence Checklist Builder

Build a due diligence checklist for your next private investment

A private fund or deal · Capital called over time · Private equity · Taxable account · Essential Questions

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Investment

Date

Your checklist

Essential questions to ask.

What you're signing up for

Your money is typically committed until the investment is sold or the fund winds down, with no way to redeem early.
You commit an amount up front, and it's called over several years. You need to be ready to fund each call.
Private equity returns come mainly when companies are sold, often years after purchase. Values in between are estimates.

The sponsor or manager

Is whoever recommended this being paid for it?

Referral fees and sales commissions are common — you just want to know.

Ask, or check the Form D

Have they ever lost investors' money, and what happened?

How a manager handled a loss tells you more than their wins.

Ask the sponsor

How much of their own money is invested — separate from fees they earn?

A stake funded by fees isn't the same as capital genuinely at risk.

Ask, or PPM

Are track-record returns shown net of all fees and expenses?

Gross returns can look much better than what investors actually received.

Ask, or PPM

Strategy and risks

How is value measured until a sale, and by whom?

Interim values are estimates and can lag what companies would actually sell for.

Ask, or PPM

How much debt is used at the company level?

Leverage magnifies both good and bad outcomes, especially in buyouts.

Ask

Fees and terms

Management fee, carried interest, hurdle, and catch-up

Together these decide how returns are split between you and the manager.

Model these terms in the Fee & Carry Calculator →

Offering or governing documents

Liquidity and getting your money back

What happens if you miss a capital call?

Penalties can include losing part of what you've already invested.

Offering or governing documents

Can you sell or transfer your interest before the investment ends?

Transfers usually need the manager's consent, and secondary sales are often at a discount.

Offering or governing documents

Are distributions paid from cash flow, or from reserves or your own capital?

Early payouts funded from reserves aren't a sign of performance.

Ask, or investor reports

Taxes

What tax form will you receive, and when?

Most private funds and deals issue K-1s, which often arrive late enough to require a filing extension.

Ask

Check it yourself

Look up whether the offering filed a Form D

Most private offerings do. It's a notice, not SEC approval — but it names the people behind the deal and any sales commissions. If there isn't one, ask why.

SEC EDGAR

Check the manager's registration and disciplinary history

Free, and takes a couple of minutes.

SEC adviser search

Check whoever is selling or recommending it

Shows licensing and any complaints or disciplinary actions.

FINRA BrokerCheck

This checklist is educational. It is not investment, legal, or tax advice, and it doesn't assess or rate any investment.

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Made with AltTrack's free due diligence checklist · alttrack.com/tools/due-diligence-checklist · Educational only — not investment, legal, or tax advice.