Traditionally, hedge funds have scoured the globe for investments.  To an increasing degree, hedge funds are scouring the globe for investors.  There are various macroeconomic reasons for this trend, including but not limited to: political and economic progress in developing countries generally and the so-called BRIC (Brazil, Russia, India, China) countries specifically; high savings rates, especially in China and Japan; the recent credit crisis, and the resulting loss of wealth in the U.S. and Eurozone countries; record deficit spending in the U.S., and resulting concerns about inflation and interest rates; etc.  At a more practical level, 2008 and 2009 witnessed significant outflows from hedge funds, and managers have been looking for new capital wherever they can find it – even if that new capital comes from places other than the usual suspect jurisdictions.  As more hedge fund capital comes from more places, hedge fund managers have been exploring and, in some cases, launching funds denominated in local currencies.  Local currency hedge funds have two chief advantages over funds denominated in U.S. Dollars or another “reserve” currency: they facilitate marketing to a wider range of institutions and individuals, and they enable investments in assets that otherwise would be inaccessible or difficult to access.  In addition, local currency funds enable managers to avoid, in some cases, certain of the administrative and legal brain damage involved in other approaches to managing currency issues.  At the same time, local currency funds implicate certain unique risks.  This article describes the four primary ways in which hedge fund managers approach multicurrency issues, one of which involves the use of local currency funds, and details the risks and benefits of each.  In particular, this article drills down on the practical and legal challenges involved in hedging currency risk, and discusses the special case of China’s new limited partnership law.