The failure by a hedge fund manager to appropriately plan for, detect and address operational risks can lead to economic and other costs (e.g., the loss of valuable business or investor information and data) and reputational harm.  Yet the challenges associated with a quickly evolving hedge fund industry, the proliferation of operational risks and resource and personnel constraints make it difficult for hedge fund managers to identify and effectively address operational risks.  A recent guide published by SEI, entitled “Top 10 Operational Risks: A Survival Guide for Investment Management Firms” (Guide), speaks directly to the lacuna in best practices in this area.  The Guide identifies some of the recurring operational risks in the hedge fund industry and offers practicable ideas for handling such risks.  This is the third and final installment in a three part HFLR series summarizing the key takeaways from the Guide.  The first installment discussed a hedge fund manager’s attitude and approach towards operational risk; the need for effective oversight of firm functions; and the imperative of appropriate training and staffing to minimize operational risks.  See “Top Ten Operational Risks Facing Hedge fund managers and What to Do about Them (Part One of Three),” Hedge Fund Law Report, Vol. 5, No. 40 (Oct. 18, 2012).  The second installment addressed information hand-offs; pitfalls in automating processes; and workflow documentation.  See “Top Ten Operational Risks Facing Hedge Fund Managers and What to Do about Them (Part Two of Three),” Hedge Fund Law Report, Vol. 5, No. 42 (Nov. 9, 2012).  This installment discusses segregation of duties; reconciliation gaps; care in entering into agreements; and planning within the rapidly evolving regulatory and competitive landscape of the hedge fund industry.