The SEC’s Office of Compliance Inspections and Examinations recently issued a risk alert on observations from examinations of investment advisers that manage hedge and private equity funds (Risk Alert). The areas on which the Risk Alert focuses include conflicts of interest; fees and expenses; and material nonpublic information and codes of ethics. As with prior risk alerts, one of the goals of the Risk Alert is to “assist private fund advisers in reviewing and enhancing their compliance programs.” To further that goal, this second article in a two-part series discusses the key takeaways from the Risk Alert for private fund managers and suggests what advisers should do now in response to the alert. The first article provided an overview of the Risk Alert. See “Four Essential Elements of a Workable and Effective Hedge Fund Compliance Program” (Aug. 28, 2014).