LP Secondary Due Diligence Checklist

Your 25-Point Framework for Evaluating LP Interests
Used by leading private equity secondaries funds

📊 Fund Performance & Economics

NAV & Valuation

Current NAV and valuation methodology
Fair value hierarchy (Level 1, 2, 3 assets)
Third-party valuation reports
NAV movement trends (last 3 years)
Discount/premium to NAV analysis

Financial Performance

Historical IRR (gross and net)
DPI, RVPI, TVPI metrics
Cash flow history (capital calls & distributions)
Remaining unfunded commitment amount
J-curve position

📑 Legal & Structural

Fund Documents

Limited Partnership Agreement (LPA)
Side letters and preferential terms
Transfer restrictions and ROFR clauses
GP consent requirements
Key person provisions

GP & Management

GP track record and reputation
Key person events or departures
Management fee structure
Carry and promote terms
GP conflicts of interest

💼 Portfolio Analysis

Portfolio Composition

Number and list of portfolio companies
Industry/sector concentration
Geographic concentration
Vintage year distribution
Top 10 holdings (concentration risk)

Asset Quality

Unrealized vs. realized returns
Problem/watch list companies
Restructuring or bankruptcy situations
Follow-on capital requirements
Exit pipeline (companies preparing for exit)

⚠️ Red Flags & Risk Factors

Critical Issues

Pending litigation or regulatory issues
GP succession or stability concerns
Significant valuation write-downs
Covenant breaches (fund or portfolio level)
Liquidity constraints

📁 Data Room Completeness

Required Documents

Complete LPA and amendments
Last 12 months of capital account statements
Annual audited financials (last 3 years)
Quarterly investor reports (last 8 quarters)
Portfolio company financials and valuations

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