In the course of their operations and investments, hedge funds (or their service providers) obtain and generate cash.  For example, when a new investor allocates capital to a hedge fund, that investor generally sends cash to the hedge fund’s administrator, who in turn sends the cash to one or more designated prime brokers once Anti-Money Laundering, Know Your Customer and similar compliance checks have been performed.  Also, when a hedge fund sells out of a position, the cash proceeds generally are deposited (or “swept”) into the fund’s prime brokerage account.  Similarly, to trade using margin from a prime broker, a hedge fund generally must deposit cash or cash equivalents into its prime brokerage account.  Like stocks, bonds and real assets, cash is a type of asset owned by hedge funds.  Like any asset, cash must be managed.  But the goals of cash management differ from the goals of managing other assets.  In general, the primary goal of cash management, at least for hedge funds, is safety and preservation of capital and access to it across all conceivable outcomes.  Secondary goals of cash management include obtaining incremental yield and keeping pace with or beating inflation.  Also, in the post-Lehman era, counterparty risk looms large as a concern to be addressed when managing hedge fund cash.  By contrast, the general goals of managing other assets involve accepting a certain level of risk for a target return.  Hedge funds traditionally have used a number of techniques to manage their cash, including purchases of U.S. Treasury bonds and other Treasury obligations, purchases of highly rated non-U.S. sovereign credit, purchases of money market fund shares and maintenance of cash balances at prime brokers.  See “Why Do Hedge Funds Have So Much Dry Powder, and What Are They Doing to Keep It Safe?,” Hedge Fund Law Report, Vol. 2, No. 20 (May 20, 2009).  Mechanically, hedge funds frequently have purchased Treasuries via overnight repurchase agreements, so that the money sleeps in Treasuries and the manager has cash available for investment during the day.  A relatively new approach to cash management, at least in the hedge fund industry, involves investing cash in brokered certificates of deposit, or brokered CDs.  Generally, a brokered CD is a financial product in which multiple CDs issued by different regional banks, of different durations and paying different interest rates, are pooled together by a broker and sold as a single offering or in a single account.  For hedge funds looking to manage cash, brokered CDs offer certain advantages over regular CDs and other cash management approaches, but they also involve potential downsides.  This article highlights, by way of context, continuing concerns about counterparty risk, then explains the mechanics of brokered CDs in more detail; evaluates the benefits and burdens for hedge fund managers of brokered CDs; and suggests reasons why some of the burdens (and benefits) of brokered CDs may be moot in light of the realities of FDIC procedure.