Private equity due diligence is different from checking a listed share: there is no continuous market price, no daily disclosure, and the fund structure itself carries terms that materially affect your actual return. This is a practical checklist to work through before committing capital, not a guarantee of a good outcome.

1. The manager's track record

  • Performance across previous funds, not just the headline figures for the best one — ask for fund-by-fund figures, ideally net of fees.
  • How long the core investment team has worked together, and whether key individuals from the track record you are being shown are still with the firm.
  • Whether reported returns are independently verified or administered by a recognised, independent fund administrator.

2. Fund structure and terms

  • The management fee and carried interest rate, and whether carry is calculated per-deal or on the whole fund (a meaningful difference).
  • The hurdle rate (the minimum return before the manager starts earning carry).
  • The fund's term, and any provisions allowing the GP to extend it.
  • Key-man provisions — what happens to the fund if a named lead individual leaves.
Regulatory checks worth making

Check the fund manager's authorisation status on the FCA Register where the activity requires FCA authorisation, and check the general partner entity's filings and directors on Companies House. Not every private equity structure requires FCA authorisation — confirm the specific regulatory position of the fund and promoter rather than assuming either way.

3. Liquidity and lock-up

  • Confirm there is genuinely no secondary market or redemption mechanism before the fund's end, beyond a possible secondary sale of your LP interest — see secondary investments for how that market actually works.
  • Ask what has historically happened when an investor has needed to exit early.

4. Portfolio transparency and reporting

  • How often you will receive valuations and portfolio updates, and in how much detail.
  • Whether the fund is a blind pool (companies not yet identified) or has already made some investments you can review directly.
  • Whether co-investment rights are offered, and on what terms — see What Is Private Equity Co-Investment?.

5. Conflicts of interest and side letters

  • Whether the GP or its principals invest their own capital alongside LPs (alignment of interest).
  • Whether other, larger investors have negotiated preferential terms via side letters, and whether that affects your own position.
  • Any related-party arrangements between the fund and companies or individuals connected to the manager.

6. The legal documentation itself

  • Read the actual Limited Partnership Agreement, not just a summary deck — the fee, governance and exit terms live in that document, not the marketing materials.
  • Get independent legal or financial advice on the LPA before signing if the commitment is significant relative to your overall portfolio.

If you are choosing a listed route instead

If direct fund access is not available or appropriate, Private Equity Investment Trusts Explained covers the listed, FCA-regulated alternative that ordinary retail investors can access without certification.

Private equity investments can lose value, and past performance is not a guide to future returns. This is not financial advice; consider speaking to an FCA-authorised adviser before investing.