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Hedge Fund Side Letters: Conflicts of Interest and Best Practices  


Author:  Kevin  Vance.


Source: Volume 26, Number 03, January/February 2013 , pp.23-30(8)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

In the wake of the financial crisis, the SEC is focusing the use of side letter agreements by hedge funds that grant preferential terms to certain investors. The author discusses how such side letters may subject the fund manager to private and governmental liability for conflicts of interest and breaches of fiduciary duties, and reviews industry best practices.

Keywords: liquidity preferences; materiality; conflict of interest; fiduciary duty; Harbinger Capital Partners; investment classes

Affiliations:  1: New York Law School.

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