The beginning of the fourth quarter often leaves hedge fund managers bracing for year-end redemptions, as December 31 is relevant to funds that permit monthly, quarterly or annual redemptions. Fund managers – and their legal and compliance staff – may also face redemption-related decisions, including whether to allow an investor to rescind an otherwise properly submitted redemption request. While an investment manager may be happy to permit an investor to rescind its request – if for no other reason than it would continue to earn fixed fees on that capital – decisions around rescission requests must weigh several factors, including potential conflicts of interest. Additionally, investors and regulators may take the view that investors that are permitted to rescind their redemption requests have essentially been granted different liquidity terms than the other investors, which can raise disclosure and fairness issues. In anticipation of year-end redemptions, this two-part series explores how fund managers should evaluate rescission requests. This first article analyzes the provisions in a fund’s governing documents that are relevant to those requests, investors’ motivations underlying rescission requests and three considerations that fund managers should factor into their decision-making processes. The second article will outline three additional factors that fund managers should consider and explore ways fund managers should document their decision-making processes. For more on the importance of adhering to a fund’s redemption terms, see “SEC Order Reminds Advisers to Adhere to Stated Redemption Procedures” (Nov. 1, 2018).