At a recent New York City Bar Association event, Deputy Attorney General Lisa Monaco emphasized the DOJ’s commitment to enforcing the sanctions imposed in response to Russia’s invasion of Ukraine, stressing the need for financial institutions, among others, to closely monitor and comply with those sanctions. Given the likelihood of aggressive sanctions enforcement – and the serious civil and criminal penalties for violations of sanctions – it is critical for private fund managers to ensure they comply with any sanctions that implicate their investors, investments or both. Although compliance with sanctions is not a new issue, it has become more prominent recently, observed Ira P. Kustin, partner at Paul Hastings, and fund managers are more aware of sanctions as an ongoing regulatory obligation than they were in the past. This article, the second in a three-part series, discusses how sanctions can impact a private fund manager’s investors and investments, including what to do if an investor or investment is subject to sanctions. The first article explained how sanctions regimes work. The third article will explore what managers should do to ensure they comply with sanctions and have sufficient protections in their fund documents. For additional commentary from Kustin, see “How Fund Managers Can Address End-of-Life Issues in Closed-End Funds” (Mar. 19, 2019).