RFP & DDQ Trends in Investment Management

Author: Bruce Kahn PhD, Portfolio Manager

Executive Summary

The institutional RFP environment is becoming more challenging, more continuous, and more operationally demanding. Sustainable investing remains one of the clearest institutional opportunity areas inside that shift. The market is expanding in size, but the economics beneath that growth are more fragile than the headline asset totals suggest. Global AUM reached $128 trillion in 2024, while workflows became more data-heavy, more technology-intensive, and more sensitive to fee pressure, implementation risk, and mandate customization.

Within that environment, sustainable investing remains one of the strongest commercial opportunities for firms that can present it as a measurable, customizable, outcome-oriented capability.

The most evident trend is that ESG considerations now extend well beyond their routine inclusion in RFPs for institutional investors—sustainability is increasingly embedded in fiduciary standards, board-level governance, portfolio construction, and the delivery of tailored client reports.

Key Industry Figures at a Glance

Sustainable Investing May Be One of the Clearest Institutional Opportunity Stories Inside a Tougher RFP Market

A notable shift in today’s institutional RFP market is that sustainable investing is no longer best understood as a sidecar to manager selection. It is becoming one of the clearest ways for asset managers to prove relevance in a market shaped by customization, private-market convergence, outcome orientation, and rising client scrutiny. A broader opportunity is emerging: showing asset owners how sustainability can support portfolio construction, strengthen fiduciary alignment, improve resilience, and expand access to growth themes that matter to beneficiaries, boards, and investment committees.

Institutional demand—alongside continued end-investor demand—has remained broad even through a noisier regulatory and market backdrop. Morgan Stanley’s 2025 individual-investor survey found that 88% of investors globally are interested in sustainable investing, with more than half planning to increase their allocations in the next year. Interest was highest among younger cohorts, at 99% for Gen Z and 97% for Millennials. On the corporate side, 88% of companies see sustainability as a value-creation opportunity, and 83% say they can measure the return on sustainability-related investment in much the same way they measure other investments.

PRI’s 2025 reporting data adds a parallel institutional signal. A record 4,327 signatories reported in 2025, 74% explicitly connected responsible investment to fiduciary duty, 81% identified sustainability outcomes linked to investment, and 70% reported acting on those outcomes. Board-level and executive-level RI KPI adoption also continued to rise. Taken together, these findings suggest that sustainability has shifted into the focal point of conversations surrounding investment governance. It is being pulled further into fiduciary language, board oversight, and measurable decision-making.

The Industry Backdrop Is Making RFPs More Demanding and Increasingly Important

That sustainable-investing opportunity sits inside a broader industry environment that is both larger and more fragile than headline growth suggests. The market has expanded dramatically, but the economics underneath have become more pressured. BCG estimates that global AuM reached $128 trillion in 2024, up 12% from the prior year, yet more than 70% of revenue growth came from market performance rather than durable net inflows. McKinsey’s 2025 work pushes the scale even higher, estimating global AuM at $147 trillion by June 2025, but its message is similar: the industry has recovered in size without fully solving the economics beneath it. BCG and McKinsey use different measurement periods and methodologies, but both point to the same broader direction of travel.

This is relevant because the RFP process itself now carries more strategic weight. When revenue yields are being squeezed, passive products continue to gather share, and clients are demanding more customization, each won mandate matters more. Loopio’s 2026 benchmark makes that explicit by showing that RFPs influence roughly 40% of the average surveyed company’s revenue, the highest level it has reported since 2019. In parallel, DiligenceVault’s manager surveys show that the largest firms are handling industrialized diligence volumes, often 1,500 to 2,500 RFPs or DDQs in a year, with a meaningful minority of that work tied directly to new business.

Once that shift is recognized, the rest of the RFP trend story becomes easier to interpret. The questions coming back in search and diligence are getting harder because the market is forcing them to. Higher scrutiny, greater governance burden, more need to justify fees, more sensitivity to implementation quality, and more demand from boards and stakeholders for portfolios that are resilient, explainable, and aligned with longer-term objectives are all feeding into the process.

The Opportunity Is Moving Toward Customizable, Outcome-Oriented Vehicles

One of the clearest reasons RFPs have become more detailed is that the product set itself has become more complex and more customizable. The old institutional search model was built around relatively discrete public-market mandates. Those searches still exist, but the industry is moving toward vehicles and combinations that require more design decisions, more servicing, and more explanation.

Cerulli reports that U.S. managed-account assets reached $13.7 trillion in 2024, up 19.8%, and that improving tax-management capabilities is now the single most common platform development priority. SS&C’s 2026 trends note reinforces the same direction by pointing to five-year CAGR of 18.7% for UMAs and 18.3% for SMAs. McKinsey’s work on the ‘great convergence’ adds another layer: active ETFs are scaling rapidly, and public-private blending is creating between $6 trillion and $10.5 trillion of potential money in motion over the next five years. Oliver Wyman’s 2025 outlook notes that semi-liquid pooled vehicles have grown at a 19% CAGR since 2018.

Put together, those findings imply that more client assets are moving into vehicles that allow tax awareness, guidelines, custom sleeves, public-private mixes, and household-level coordination. That inevitably produces more elaborate RFPs. It may also bolster the commercial case for sustainable investing. Customization allows sustainability to move beyond a generic exclusion list into a more substantive mandate architecture: tax-aware sustainable SMAs, impact sleeves, climate-transition allocations, bespoke reporting, values-aligned constraints, and public-private sustainability solutions tied to infrastructure or private credit.

Portfolio Repositioning Is Reshaping the Questions That Come Back in Search and Diligence

The platform-intelligence data from Nasdaq eVestment is especially valuable because it captures what allocators are researching and funding in real time, not just what they say in surveys. The Q3 2025 Institutional Intelligence Report covers more than $36 trillion of institutional assets, 29,000 public-markets products, 84,000 screens, and nearly 230,000 profile reviews. In that quarter, institutional asset owners pulled $195.5 billion from equity products and added $98.7 billion to fixed income and $74.1 billion to cash and capital-preservation strategies. Eight of the ten strongest inflow universes were fixed income.

This is consequential to RFP construction because portfolios are increasingly being rebuilt around specific needs rather than broad-style allocations. In a more volatile macro regime, fixed income, cash preservation, unconstrained duration, and defensive structures naturally prompt more questions about liquidity, drawdown control, downside management, and implementation realism. Even when equity is under review, the research activity is more selective and less generic. The firms that stand out in that environment are the ones that can explain how a strategy fits into a portfolio being rebuilt around rate sensitivity, rebalancing, and cost discipline, as well as what makes the approach compelling in that context.

At the same time, this environment creates a natural opening for sustainable investing. The same allocators looking for resilience, structural themes, and clear outcome definitions are often looking for transition infrastructure, resource efficiency, climate adaptation, and companies whose governance around long-term risk is more credible. Sustainability is therefore not separate from the asset-allocation conversation. It is increasingly one of the ways that conversation is expressed.

Institutional Flow Summary: Q3 2025

ESG Has Stabilized as a Category, While AI Governance and Cybersecurity Have Surged

While ESG scrutiny remains a baseline expectation in RFPs and DDQs, it has plateaued as a growth category. The fastest-growing areas of allocator inquiry are now AI governance and cybersecurity. DiligenceVault’s 2025 survey found that 50% of asset managers reported a significant increase in questions on these topics.

The DDQ of 2026 is increasingly asking, ‘How is your data governed, and can our systems interface with yours?’ Allocators want assurance that a manager’s data infrastructure is auditable, secure, and machine-readable. This does not mean responsible-investment practices are declining. Quite the opposite: PRI’s 2025 reporting cycle was the largest ever, and 81% of reporting signatories identified sustainability outcomes connected to investment while 70% said they were acting on them. What has changed is the nature of differentiation. ESG has become table stakes; the differentiator is now the credibility of implementation, governance, and measurement.

What this means for RFPs is that ESG questions have shifted away from novelty. Instead they are embedded in baseline due diligence expectations. But allocators are now looking deeper, probing how sustainability is integrated into investment decisions and portfolio construction, whether firms have measurable RI-linked KPIs at the board level, and how scenario analysis informs strategy. Regional variation matters too: European allocators often emphasize biodiversity and regulatory compliance, U.S. allocators more often emphasize shareholder rights, and Asia-based allocators increasingly emphasize collaborative engagement and technology-first approaches to sustainability data.

Shifting DDQ Inquiry Priorities

The Response Function Is Being Industrialized

The operational side of the story is just as important as the product side. The surveys from Loopio and DiligenceVault show a response function that has become larger, faster, and more performance-sensitive. Loopio’s 2026 benchmark finds that the average team submitted 166 RFPs in the prior year, up from 153, while top performers handled 180. Nearly half of teams responded to more RFPs than the year before, 79% used AI in the response process, 50% cited bandwidth as a top challenge, and the average response still took 33 hours end to end.

The key analytical point is that RFP writing may no longer be the right frame. The more accurate frame is response-system design. Managers now need a repeatable operating model that can handle high volume without eroding quality, while still leaving room for the customization that actually differentiates them. That means approved source content, review workflows, role clarity, audit trails, version control, and smarter deployment of scarce subject-matter experts. The firms best positioned to respond will pair effective writing with better information architecture.

That is also why AI adoption on its own may be an insufficient measure of readiness. Many firms can now generate prose faster. The more meaningful question is whether they can generate answers from the right sources, with the right controls, and with enough data consistency that the answer still holds up under scrutiny. DiligenceVault says 70% of firms still rely on shared folders as their primary content environment, and 61% of respondents still rely heavily on Word and Excel. KPMG’s 2025 outlook makes the same point from another angle: AI maturity is rising, but the most common barriers remain data integrity, model accuracy, training gaps, and security risk.

AI Adoption in Asset Management: Key Metrics

Standardization Is Rising, but Customization Is Not Going Away

One of the easiest mistakes to make when looking at the response market is to assume that standardization and customization are opposites, and that one must displace the other. The evidence suggests something more nuanced. DiligenceVault’s 2024 survey indicates that only about 30% of investors accept a standard DDQ, while about 70% send a custom DDQ or supplemental questions. Yet its 2025–26 update also shows standard DDQ acceptance rising from 26% in 2023 to 38% in 2025—a 46% increase. The right interpretation is that the market is standardizing the common core so it can spend more time customizing the valuable edge.

That hybrid pattern fits the broader industry direction. As the product set gets more complex and client expectations get more specific, managers need stable, reusable answers for firm facts, ownership, AUM, policies, service providers, cybersecurity controls, compliance structures, and baseline ESG governance. But the farther the allocator gets from those foundational questions and toward actual mandate design, the more customization returns. The result is a more effective allocation of work. Standardization handles the table stakes; customization handles the alpha.

This is also where sustainable investing benefits again. The more the market shifts to this hybrid model, the easier it becomes for managers to standardize their core sustainability governance—policy, oversight, KPI structure, scenario analysis, stewardship framework—while tailoring the mandate expression to client needs. One client may want climate-transition reporting, another may want exclusions, another may want a private-markets impact sleeve, and another may simply want evidence that material sustainability risks are integrated into the investment process.

Data Quality, Transparency, and Discoverability Shape the Process Before the Formal RFP Starts

Another important conclusion from the two source documents is that the formal RFP is only one part of the buying journey. Nasdaq’s Brand Awareness report shows that nearly 5,000 asset owner and consultant users across 54 countries and territories generated just under 200,000 profile reviews in Q4 2025 alone. The Institutional Intelligence report shows similar scale, with almost 230,000 reviews in Q3 2025. Those figures tell us something practical: managers are being evaluated long before a questionnaire lands in their inbox.

That pre-RFP stage is where brand awareness, profile completeness, and capability discoverability start to matter. Nasdaq’s framework distinguishes between firm awareness—how many unique allocators review at least one product—and product awareness—how many products each allocator reviews. That distinction is commercially important. A firm can be well known without having breadth, or have breadth without concentrated interest. Successful firms manage both. They make it easy for consultants and asset owners to understand what they do, where they specialize, and why those capabilities matter now.

This point has direct implications for sustainable investing as well. If sustainable capabilities are not clearly visible on manager platforms—through strategy descriptions, reporting examples, team information, and complete profile data—then a manager may never even make the sustainability shortlist. In other words, the opportunity in sustainable investing begins before the RFP and DDQ stage. It begins with discoverability.

Brand Awareness and Data Population Correlation

Asset Owners Are Raising the Bar on Governance and Process

The allocator-side guidance reinforces how the selection process is being professionalized. A global asset manager typical guide recommends a five-to-seven-year review cycle for many nonprofit mandates, small review subcommittees of three to five people, circulation to roughly five to ten firms, and the use of RFIs, weighted scoring rubrics, conflict-of-interest disclosure, net and gross returns, benchmark comparison, attribution, GIPS, and peer references.

The implication is that governance friction is becoming a real selection variable. A strong response is one that makes comparison easier, reduces ambiguity, documents conflicts clearly, explains implementation plainly, and can be defended in front of a board or investment committee. Sustainable investing fits that trend when it is presented in the same disciplined way: linked to fiduciary duty, connected to portfolio outcomes, and supported by measurement rather than rhetoric.

Fee Pressure, Convergence, and Insourcing Are Changing How Managers Compete

Fee compression and rising operating costs continue to reshape the economics of asset management. As passive products gather a larger share of industry flows, the value of clear differentiation in an RFP only grows. In this environment, distinctions such as active skill, implementation quality, reporting, private-markets access, and sustainability capability can carry greater commercial significance.

At the same time, the boundaries between traditional and alternative mandates are becoming less durable. McKinsey’s convergence thesis suggests that private capital’s penetration into wealth, defined-contribution, and insurance channels could mobilize trillions of dollars of new capital, while managed accounts, active ETFs, and semi-liquid vehicles create more ways to package exposures. RFPs therefore have to carry more of the burden of explaining wrappers, liquidity, customization, portfolio fit, and client service.

Large asset owners are also becoming more sophisticated and, in some cases, more direct. Oliver Wyman notes that sovereign funds are increasingly accessing private credit directly, while insurers are simultaneously looking outward for external expertise to improve yield and portfolio construction. The result is a market in which the bar for external firms rises as internal capability rises. The burden is increasingly to demonstrate capabilities that exceed what many allocators can build in-house.

Outlook for 2026–2027

Looking ahead, several forces are likely to continue reshaping the RFP and DDQ market. AI-native workflows will become more normal, but the more important shift will be toward AI-ready data and controlled content infrastructure. Allocator diligence will probe data interoperability and system readiness, not just performance and organizational stability. Fixed income, capital preservation, and customized solutions will likely continue to command a larger share of searches than in the last cycle, while emerging markets and private-market access remain bright spots where allocators still seek differentiated active capability.

Standardization is likely to continue to rise, especially around baseline diligence and machine-readable data exchange, but customization will remain essential in mandate architecture, reporting, sustainability expression, and service design. Responsible-investment due diligence is also likely to deepen beyond policy existence toward measurable outcomes, leadership accountability, and stronger climate / scenario analysis practices.

In the context of selection and shortlisting, firms that demonstrate robust data management practices, transparent profile visibility, systematic workflow processes, and quantifiable sustainable investing capabilities are positioned to distinguish themselves within the industry. Volume alone is unlikely to differentiate in this environment. The firms that can answer the right questions with credible data, implementation clarity, and customization discipline will be better positioned to respond to RFPs and to shape the shortlist before the questionnaire ever arrives.

Selected Sources

• Boston Consulting Group, Global Asset Management Report 2024 and Global Asset Management Report 2025
• McKinsey & Company, Asset Management 2025: The Great Convergence
• Nasdaq eVestment, Institutional Intelligence Report Q3 2025; Brand Awareness Rankings Q4 2025
• Cerulli Associates, U.S. Managed Accounts 2025
• DiligenceVault, 2024 Global Manager Survey Insights and 2025–26 Global Manager Survey Insights
• Loopio, RFP Response Trends & Benchmarks 2026
• KPMG, Asset Management Industry Outlook 2025 and Asset Management & Private Equity CEO Outlook
• Morgan Stanley Institute for Sustainable Investing, Sustainable Signals 2025 and Sustainable Reality updates
• PRI, 2025 reporting data blog post on policies, commitments, and strategy
• Morningstar, US Asset Managers: 2025 Q4; asset management trends coverage
• Oliver Wyman, 10 Asset Management Trends for 2025 / 2026 themes

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