Hedge Fund Managers Advocate Postnuptial Agreements

The following excerpts are from Brooke Masters, ‘Postnup’ boom as hedge funds seek to trim exposure to spouses, Financial Times, May 31, 2007:

At least one US hedge fund is refusing to take on new partners until they sign a postnup barring their spouses from making any claims on the fund, says Ken Burrows, a New York attorney who has written all the fund’s agreements. * * *

Another New York attorney, who has handled four postnups this year, says the people seeking them develop a “mindset” that makes them think “all my spouse is doing is spending my money. Let me staunch the flow now. Let me limit the goody bag and limit my future exposure.” * * *

Most hedge funds do not mandate postnups, but partners often encourage one another to sign them, to protect both the firm and themselves.

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing this article to my attention.