Due Diligence Committee

The new INREV Guidelines might be in full circulation but this does not mean the end of work for the related committees.

The Due Diligence Committee, in particular, has been working hard to expand the suite of due diligence questionnaires (DDQ) to support the growing range of non-listed products. “The original DDQ for non-listed property funds was the starting point for promoting consistent information exchange between investors and fund managers. Therefore, as INREV’s remit expands to other products such as debt funds, tailored DDQs are a natural starting point,” explains Anne Gales, Chairman of the Due Diligence Committee.

September will see the latest addition to the set of DDQs with the launch of the Debt DDQ, which addresses the special features and characteristics of real estate debt vehicles. Initially, the aim was to produce a single questionnaire across the products but, for clarity, the Committee has decided on separate versions to cover real estate funds, funds of funds and multi-managers, and this latest version for debt funds.

This project began during the revision of the Guidelines. It was created by a working group within the committee comprised of experienced debt investors, consultants, fund managers and advisers. The working group used the original DDQ as a starting point before adapting this to cover all the specific characteristics of debt funds.

The questionnaire was then reviewed by the remaining members of the Due Diligence Committee before debt fund managers from Pramerica, ICG Longbow, AXA Real Estate and Caerus Debt Investments provided valuable input. “The positive feedback was important to ensure the content was relevant but also to begin the important process of introducing the DDQ to the leading debt fund managers in Europe,” said Gales. Following its launch, the committee will focus on promoting the debt DDQ further among the membership with the aim of it becoming a useful tool in the real estate credit asset class.

As INREV’s remit expands, tailored DDQs are a natural starting point

Another responsibility of the Committee is to continue to ensure all the DDQs remain relevant. The main DDQ was reviewed last year as part of the revised Guidelines by bringing it into line with the funds of funds DDQ that was created in 2012, as well as adding more detail on sustainability. The group was also responsible for the standardised Non-Disclosure Agreement (NDA) launched last year. “The work of the Committee is ongoing and we welcome feedback on all our products, old and new,” said Gales.