Hedge fund managers who have made or are contemplating significant investments in proprietary technology face at least three major issues: (1) whether to develop that technology internally or buy or lease it from a third party; (2) whether to seek to patent it; and (3) how to prevent theft. More often than not, a hedge fund manager is better served by developing its own technology in cases where that technology is central to its trading strategy or operational infrastructures. Internal development confers greater control over the technology, increases the value of the advisory entity and strengthens the case for investors to invest with the manager as opposed to any other licensee of a third-party technology. In general, however, it is ill-advised to seek patent protection for these technologies, given that the process is long and may require disclosure of information that can undermine the proprietary value of the technology, and the protection itself is uncertain. To prevent theft, managers can utilize confidentiality agreements, robust pre-employment (or pre-independent contracting) screening and security measures embedded in the technology itself. Even with carefully thought-out protections, however, intellectual property (IP) remains uniquely susceptible to theft. This article explores the three issues identified above – whether to build or buy, whether to seek to patent and how to prevent theft – and discusses “soft” IP (copyright and trademark) in the hedge fund context. See our two-part series on how hedge funds can protect their brands and IP: “Trademarks and Copyrights” (Feb. 23, 2017); and “Trade Secrets and Patents” (Mar. 9, 2017).