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B. G., Opalesque Geneva for New Managers:

U.S. law firm Seward & Kissel has, for the seventh year in a row, conducted a Study examining side letters negotiated by their hedge fund manager clients. The Study covers the period from July 2021 through June 2022.

78% of the side letters were with managers in business for two or more years (Mature Managers), and 22% were with managers less than two years old (Newer Managers). The underrepresentation by Newer Managers can be attributed to the continued popularity of founders' classes in the past several years, which generally decreases the need for special terms in side letters.

Side letters are agreements that supplement or modify the terms of a fund's offering memorandum, subscription agreement or constitutional documents. They are often granted to large or important investors prior to investment and provide preferential treatment and typically, for example, will cover agreements by the manager to waive or reduce fees, grant enhanced transparency, or allow preferential liquidity provisions to that particular investor.

The key takeaways of the 2021/2022 Hedge Fund Side Letter Study are:

• Excluding certain outliers, the average regulatory assets under management of the Mature Managers in the Study was approximately $4bn ($6.3bn in the p......................

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