Hedge fund managers frequently have occasion to enter into confidentiality agreements or nondisclosure agreements (collectively, NDAs).  For example, distressed debt hedge fund managers often enter into NDAs before obtaining borrower financial statements and sales projections; managers that take control positions in companies often enter into NDAs before taking a “deep dive” into target company data; and managers that invest in real estate often enter into NDAs before obtaining tenant, property and related information.  These are just three of the many instances in which NDAs come into play in day-to-day investment analysis by hedge fund managers.  NDAs are ubiquitous, but typically receive surprisingly little attention from investment and even legal staff at managers.  NDAs are viewed as a bothersome chore – a box to be checked – rather than a fundamental aspect of the investment process.  But that view is dangerously mistaken.  NDAs can have powerful legal and practical consequences.  Drafting or monitoring missteps can, among other things, significantly constrain the ways in which information can be used, can put a manager at risk of insider trading violations and can limit investment exit opportunities.  This article seeks to shed light on the NDA process, a critical but underappreciated aspect of the hedge fund business.  It is the first in a three-part series being published in Hedge Fund Law Report by William G. Frenkel and Michael Y. Sukhman, principals at the law firm Frenkel Sukhman LLP.  Specifically, this article starts by identifying six discrete rationales for the importance of NDAs in the hedge fund context, then goes on to discuss: the “market” for duration provisions; events that trigger expiration of confidentiality obligations; four key elements of the definition of confidential information; and four typical carve-outs from the definition of confidential information.  The second article in this series will discuss: the scope of permitted disclosure of confidential information; return and destruction of documents; and required disclosure.  And the third article in this series will discuss remedies, damages and liability, and non-confidentiality restrictions in NDAs.