Loans secured by limited partnership and limited liability company interests are an important source of liquidity for investors and of revenue for lenders.  However, the constitutional documents of hedge funds often provide that a holder of a hedge fund interest may not pledge its interest without the prior consent of the hedge fund’s general partner, manager or another party (the “required assenter”), which is an obstacle to the lender taking security over the hedge fund interest.  Consequently, where an investor as pledgor pledges its hedge fund interest to a secured party as security for a loan, the transaction parties need to obtain the consent of the required assenter to the investor’s pledge of the hedge fund interest, although under some circumstances provisions of the Uniform Commercial Code as in effect in certain jurisdictions may allow the investor to create a security interest despite the failure to obtain the required assenter’s consent.  Many required assenters refuse to consent or agree to provide only a limited consent that does not fully protect the secured party’s interests.  Fortunately, where the hedge fund interest is transferred in compliance with the fund’s governing documents by the investor to a securities intermediary, which becomes the legal owner of the fund interest, the secured party may take a security interest in the securities account, the security entitlements relating to the financial assets credited to such securities account and the investor’s indirect pro rata property interest in the financial assets credited to such securities account, in each case, without obtaining the required assenter’s consent, even when consent to a pledge of the fund interest is required by the applicable fund documents.  In a guest article, Sabrena Silver, a Partner at Linklaters LLP, and Scott E. Waxman, a Partner at Potter Anderson & Corroon LLP, detail the specific legal and business mechanics whereby a hedge fund investor may pledge its hedge fund interest as collateral for a loan, even where the hedge fund documents require such consent but the hedge fund’s general partner, manager or another relevant party refuses to grant it.