Historically, hedge fund managers generally have not been required to disclose information about their funds to regulators or the public. Hedge funds were excluded from the definition of “investment company” in the Investment Company Act of 1940 and therefore did not have to file registration statements, as mutual funds do. Many hedge fund managers were not required to register as investment advisers and therefore did not have to file Form ADV, which contains fund information. And the U.S. had no analogue to the U.K. FSA’s periodic reports on systemic risk posed by hedge funds
. Hedge funds are still excluded from the investment company definition, but many managers now must register and file Form ADV. See “How Can Hedge Fund Managers Rebut the Presumption of Materiality of Certain Disciplinary Events in Form ADV, Part 2?
,” Hedge Fund Law Report, Vol. 5, No. 1 (Jan. 5, 2012). And, as the industry well knows, the U.S. has implemented its own version of systemic risk reporting by private fund managers via Form PF. See “Assumptions to Consider in Completing Form PF Effectively: Experiences from First Filers
,” Hedge Fund Law Report, Vol. 5, No. 39 (Oct. 11, 2012). Form ADV requires hedge fund managers to disclose significant fund information to regulators and the public, and Form PF requires managers to disclose voluminous and detailed fund information to regulators. However, the instructions to both forms now allow a manager to preserve the anonymity of its private funds by using a code or designation to identify the funds referenced in those forms. Some well-known hedge fund managers reportedly have taken advantage of this new opportunity, and there is speculation that more managers will do so. Nonetheless, the relief provided in the instructio
ns is conditioned on satisfaction of delineated obligations. This article provides an overview of key considerations for fund managers that wish to mask the identities of their private funds in Form PF and Form ADV filings. Specifically, this article outlines some of the reasons why hedge fund managers may wish to shield the identities of their private funds in Form ADV and Form PF; the circumstances under which hedge fund managers can mask the identity of their private funds; how fund managers can go about disguising the identities of their private funds; whether such masking will raise suspicion from regulators and investors; and best practices for managers that wish to implement a masking strategy.