Essential Strategies for Hedge Fund Managers Amid US Tariff Volatility

In these turbulent times, hedge fund managers must navigate a complex landscape of legal and regulatory challenges.

Here are some essential points to keep in mind in a period of unpredictable policy making severely impacting on global markets:

1. Regulatory Notifications: Ensure compliance with FCA and SEC requirements. Be proactive in notifying the FCA about significant impacts on your firm's operations or reputation. For SEC-registered advisers, focus on client and investor disclosure obligations.

2. Risk Management: Regularly assess and adjust risk management policies in line with AIFMD requirements. Monitor risk limits and notify governing bodies if inconsistencies arise.

3. Trading and Counterparty Issues: Review trading agreements for margin calls, NAV triggers, and material adverse change clauses. Be prepared for increased margin calls and consider proactive communication with counterparties.

4. Short Selling Regulations: Stay updated on changes to short selling rules, particularly in Europe and Asia. Be aware of national bans and disclosure threshold adjustments.

5. Investor Communications: Maintain consistent and transparent communication with investors. Avoid selective disclosure and ensure alignment with regulatory notifications.

6. Fund Documents and Obligations: Diligently review side letters, seeding agreements, and managed account agreements for performance-related triggers and material adverse change clauses.

7. Liquidity Management Tools: Understand the liquidity management tools available in your fund documents. Consider whether lock-ups and investor level gates already provide sufficient protection or whether alternatives like side pockets, fund level gates or, in extreme situations, suspensions, might need to be considered.

Please don't hesitate to get in touch if you need to discuss.