38.7 DUE DILIGENCE ISSUES ARISING IN THE CONTEXT OF FUNDS OF FUNDS
When selecting a single FoF from more than 2,000 active FoFs in existence, prospective investors need to have a clear due diligence process. A useful tool in this process is the Alternative Investment Management Association (AIMA)'s Illustrative Questionnaire for Due Diligence of Fund-of-Funds Managers. Most FoFs have adopted this questionnaire to provide investors with answers to standard questions. While this questionnaire offers a starting point for due diligence, most investors will modify the standard questions to incorporate information that is needed to assess the strategy and risks of a given investment manager.
The AIMA questionnaire is divided into the following 10 areas: