Due Diligence for Fund Managers — What Institutional Investors Want to See
May 2025
As a private fund manager, you already know that raising capital isn’t just about performance. Institutional LPs, family offices and even experienced high-net-worth individuals are asking tougher questions and digging deeper into your legal, compliance, and operational infrastructure. It’s not enough to point to returns and a deck. If your back-end isn’t buttoned up, investors will notice.
At Moeller Law PLLC, we work with emerging and established managers to prepare for this scrutiny. Whether you’re gearing up for a first institutional close or preparing for a platform-level review, we help organize your fund and adviser documentation so you can present a professional, well-governed operation.
Fund Documents Need to Match Reality
Investors want to see that your fund, general partner, and management company are properly formed, well-documented, and aligned with your operating model. That includes clean governing documents, clear ownership and control provisions, and properly executed resolutions or consents related to fund launches or changes in leadership. We help managers confirm their structure reflects the current business, not just the launch-day version. This includes reviewing operating agreements, limited partnership agreements, and internal governance policies to ensure consistency across documents.
Most managers have a PPM, LPA, and subscription documents — but not all of them reflect how the fund actually operates today. Fee disclosures, redemption mechanics, key person definitions, and allocation language are just a few areas where inconsistencies can creep in. We help managers identify where their documents are out of sync, clarify vague provisions, or prepare clean summaries of fund terms that can be shared with prospective LPs. If you’re managing side letters, co-investment rights, or fund amendments, having an organized tracking system and a clear summary of key terms is critical.
Adviser and Compliance Materials
If you’re relying on the exempt reporting adviser (ERA) exemption or are a state-registered adviser, investors will want to see evidence that you’re operating within the appropriate framework. This includes a current Form ADV filing, internal compliance policies (even if they’re abbreviated), and processes for handling conflicts, fees, and investor communications. We assist advisers in confirming whether additional state filings are required, prepare or update compliance manuals where appropriate, and work with compliance vendors or consultants as needed. If your firm is approaching a threshold where registration may soon be required, we help plan for that shift in advance so you’re not caught flat-footed during a diligence process.
Other Areas That Get Attention
Investors often request more than just core fund documents. Marketing decks, service provider agreements and track record support are all fair game, especially if you’re presenting legacy performance or working with a lean team. LPs may also want to see your AUM breakdown, key personnel bios and a basic organizational chart. In one case, a manager included a composite track record in their pitch deck but had no documentation confirming that the trades were executed. The LP asked for a sample of random files as verification, and the lack of clarity delayed the close by several weeks while the manager assembled backup materials.
Expense allocations are another focus. If the fund is paying for legal, operational, or compliance costs, that should be clearly disclosed and consistently applied across documents. For instance, an LP flagged that the legal fees disclosed in the fund’s Form ADV didn’t match the expense allocation language in the PPM. This inconsistency led to follow-up calls and legal revisions mid-process that resulted in a side letter clarification. This could have been prevented with better proactive coordination. We help fund managers anticipate these requests, organize the right materials and coordinate with fund administrators and accountants to present a clear, consistent picture.
Diligence isn't just about checking boxes. It's about telling a story — that your fund is professionally run, well-structured and built to scale. Having clean, organized documentation reinforces trust and saves time, especially when an LP moves from interest to commitment. Moeller Law PLLC serves as outsourced general counsel to fund managers who want to be ready, not reactive. If you're preparing for investor diligence or just want to tighten up your documentation, we’re here to help.
