Hedge funds being structured and launched today are incorporating lessons learned during the market turbulence of the last year, and especially of the last two quarters.  In particular, managers are structuring new funds so that the duration and liquidity of the fund matches as closely as possible the duration and liquidity of the assets in the fund’s portfolio.  For example, hedge funds with a mandate to invest in less liquid assets – such as distressed debt, shares of private companies, real estate and certain other hard assets – are incorporating fund terms more traditionally associated with private equity funds.  One goal of these so-called “hybrid” funds is to avoid a disorderly liquidation of assets at inopportune times.  Another goal is alignment of expectations – to let investors assess the fund’s liquidity profile at the time of investment rather than after an investment is made.  Yet another goal is to do directly – retain assets and avoid sales at distressed prices – what various managers have been forced to do indirectly, via side pockets, gates, redemption suspensions and similar tools.  We explore the rationale for employing a hybrid structure, the range of hybrid terms and structures (including components derived from traditional private equity and hedge fund models) and the strategies for which hybrids may be particularly well suited.