Abstract
PurposeThis paper seeks to discuss the Guidance Note on disclosure of hedge fund side letters issued by the UK's Alternative Investment Management Association (AIMA) in September 2006.Design/methodology/approachExplains the meaning of “material” and “non‐material” and recommends immediate actions and ongoing disclosure policies for funds and fund managers.FindingsGenerally, it is more appropriate for disclosure to come from the fund than the fund manager. The manager has a degree of discretion as to what constitutes a “material” term. The new FSA approach does not prohibit the use of side letters.Originality/valueAn interpretation of the Guidance that will help fund managers fine‐tune their policies on use of side letters and disclosure of terms in those letters.
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