Many hedge funds operate as heavily relationship-focused businesses in which the luring of new investors, the cultivation of investor relationships and daily trading and investing all fall within the purview of a single individual or a small number of people. With such authority comes huge responsibility and the need to envision, with meticulous care, what steps will be followed in the event that a key person at a fund dies, suffers a debilitating or long-term illness, leaves or otherwise ceases to have close involvement in operations. Hence, many hedge fund managers include key person provisions in their limited partnership agreements. Fund managers must not only carefully draft key person provisions that are comprehensive and sufficient but also ensure that they follow the terms of those provisions if a key person event should occur. This second article in our two-part series delves into the operational logistics of what happens when a key person event occurs. The first article explained what key person provisions are and in which documents they typically appear; the terms of such provisions, including which personnel they cover, what scenarios could trigger them and investor rights if they are triggered; why they are critical in the SEC’s eyes; and how they relate to succession planning. See “Key Person Provisions in Hedge Fund Documents: Structure, Consequences and Demand From Institutional Investors” (Sep. 17, 2009).