A Diligence Self-Assessment for RIAs Scaling Private Markets

A practical field guide for evaluating whether your diligence process is built to scale.

Private markets are no longer a side allocation for many RIAs. As exposure grows, so does opportunity flow, scrutiny, and internal complexity. In our conversations, it’s increasingly common to see RIAs allocating north of 20% of client portfolios to alts.

What often surprises firms is not the difficulty of evaluating a single private investment. The challenge shows up later, when volume increases, and the same process is asked to carry more weight than it was designed to handle.

At the same time, the tooling around private markets has proliferated. The opportunity cost of a plentiful vendor set is showing up as a patchwork of point solutions, shared drives, spreadsheets, PDFs, and email threads to manage diligence, documentation, and oversight. Each tool may solve one piece of the problem. Together? They often introduce fragmentation rather than clarity and fragility rather than scalability.

This self-assessment helps you step back and evaluate whether your diligence process is positioned to support where your firm is going based on the learnings of where it has been.

Why this assessment matters

In public markets, scale is largely handled for you. Data is standardized. Performance is visible. Oversight is continuous by default.

Private markets are different. There is no centralized database. Each firm builds its own understanding of the opportunity set over time, through experience, analysis, and repetition.

Teams often discuss diligence in the context of compliance, but in practice, it supports much more:

• Investment committee conviction
• Advisor confidence in client conversations
• Compliance and audit readiness
• Consistency as teams grow and change

RIAs often encounter the natural limits of processes built around fragmented information, manual handoffs, and tools that were not intended to carry context end-to-end.

A self-assessment of your diligence process

As you read each section, ask whether the statements feel true for your firm today.

1. Where does judgment live?

At many firms, a small number of experienced people typically drive diligence quality. Their expertise is real and valuable. Is it portable?

Ask yourself:

• If a key team member were out for a month, could others confidently explain why specific private investments were approved?
• Can you quickly trace how your team identified and weighed risks across different deals?
• Does your process retain how your team made decisions, or mostly the final conclusion?

When diligence context primarily lives in people and one-off documents, it becomes harder for it to travel intact as volume increases. 

The ability to enable real-time readiness through a portable, digital access point that maintains the same quality, perhaps even elevates it, is the difference between your ability to confidently and securely reach and maintain scale with your diligence process. 

2. How durable and reproducible is your diligence?

Reproducibility matters not because outcomes must be perfect, but because the process must be defensible.

“When the SEC looks at an alternative investment, they’re not asking if it was right or wrong. They’re asking: did you do the work and can you show it?”

— Logan Henderson, Co-founder & CEO, Gridline

Ask yourself:

• If asked tomorrow, could you retrieve the complete diligence record for a specific investment without a scramble?
• Are documents, approvals, and rationale easy to locate and clearly connected?
• Would someone outside the original decision process understand the reasoning?

Diligence work often needs to travel further beyond the initial decision and across the firm, supporting advisors, clients, and compliance. When the record is fragmented across tools, inboxes, and individual memory, that travel becomes harder than it needs to be. 

The ability to access a digital, centralized repository that can reproduce the original investment memo and DDQ in real-time can be the difference between always being SEC audit-ready and continuing past practices of chaos and team anxiety. 

3. Does diligence support advisors and clients downstream?

Diligence does not end at the investment committee.

Ask yourself:

• Can advisors easily access and understand the rationale behind an investment?
• How confidently can client questions be answered without redoing analyses?
• Does the same core reasoning show up consistently in advisor and client conversations?

When teams structure diligence well, it becomes an enablement function, not just a gatekeeping step.

Having a standardized investment memo provides a standalone tool for RIAs to independently advise clients and proactively get ahead of potential client questions tied to rationale, strategy, and risk. This means the integrity and output of your diligence process remains intact without burdening investment team members to support advisor education and client conversations.

4. What happens as volume continues to increase?

This is the forward-looking question. If you’ve made it here and you’re batting a thousand, this may be the one question that triggers a pause if what you’re doing today isn’t prepared to handle the volume of the future. 

Ask yourself:

• If your private market exposure doubled over the next two years, what would break first?
• Would headcount need to scale to keep up?
• Would technology need to be adopted?
• Would confidence increase or erode as complexity rises?

Firms that navigate this transition well tend to recognize early that scaling private markets is as much an operating question as an investment one.

To maintain compelling margins, it’s simply not feasible to continue investing in additional bolt-on technology systems and investment team personnel to solve the problem. This is inherently the tipping point where RIAs decide to either work with an OCIO group and outsource a portion of their diligence or spend a few years investing in building an in-house AI engine to add more latitude and velocity to existing processes. Both options add considerable near-term cost to protect the long-term horizon for the firm. 

Why infrastructure becomes unavoidable at scale

At a certain point, these shifts run into a structural constraint.

Point solutions, shared drives, and manual workflows can support individual steps, but they struggle to support the entire lifecycle of diligence without additional coordination or manual effort.

In a 2025 industry survey of financial professionals, 56% reported that investment due diligence is a major time-consuming operational challenge. An equal share cited ongoing servicing tasks, such as managing capital calls, documentation, and fund communications, as significant drains on their time and resources. This reflects what many advisors experience first-hand: the administrative load around private investments scales faster than the tools they use to support it.

This is where many firms begin to look for end-to-end infrastructure, not because they want new technology, but because they want:

• One place where diligence lives
• A persistent, auditable record of decisions
• Context that survives team growth and time
• Systems that absorb complexity instead of multiplying it

For firms operating at scale, infrastructure is less about efficiency and more about durability.

“Firms don’t look for systems because they want new technology. They look for them because the coordination work starts to outweigh the investing work.”

— Logan, Co-founder & CEO, Gridline

Closing perspective

Private markets reward long-term thinking. The same is true of the systems that support them.

Firms that pause to evaluate how their diligence process will hold up over time are not being cautious. They are being strategic.

Clarity here does not require immediate change. It’s about seeing where the cracks may form before you’re managing twice as many investments.

About Gridline

Gridline is an end-to-end alternatives management platform built to support how RIAs actually operate private markets at scale. We centralize the full alternatives workflow, from diligence and fund launch through portfolio oversight, reporting, and ongoing operations. This means private investments can be managed with the same clarity and control as public markets.

At the core of the platform is purpose-built infrastructure designed for private assets, paired with AI that strengthens decision-making, preserves institutional knowledge, and creates a durable audit trail over time.

AltComply is Gridline’s AI-powered diligence suite. It helps firms structure, retain, and reuse investment analysis so judgment compounds across opportunities, teams, and time. It supports investment committees, advisors, and compliance from a single source of truth. AltComply streamlines private fund diligence by transforming raw documents into structured, AI-generated insights, investment committee memos, and DDQs, creating a repeatable, auditable process teams can trust. It also includes an AI-powered red flag engine that surfaces non-standard terms and areas requiring closer review within private fund documents, along with an interactive Q&A that allows teams to ask natural-language questions and receive clear, cited answers grounded in the source materials.

For a closer look at how AltComply helps RIAs make diligence repeatable and audit-ready, watch this short walkthrough.

About the Author

Charles Patton leads manager selection, portfolio construction, and General Partner (GP) relationships at Gridline as Investment Director. Prior to joining Gridline in November 2022, Charles worked on Wells Fargo’s Investment Portfolio team and previously served as a Summer Associate at the University of Virginia Investment Management Company (UVIMCO).

While earning his MBA at the University of Virginia’s Darden School of Business, he was Chief Investment Officer of Darden Capital Management. Charles holds an undergraduate degree from the University of North Carolina and is a CFA charterholder.