Hedge fund managers are increasingly managing multiple products with different investment strategies and fee structures, and global regulators have enhanced their scrutiny of such arrangements.  Among other things, regulators are concerned about managers favoring one fund over other funds.  For instance, regulators have scrutinized arrangements in which managers allocate more attractive investment opportunities (e.g., initial public offerings) to funds that pay higher fees to the manager.  See, e.g., “How Can Hedge Fund Managers Collect the Investor Information Required to Comply with the Prohibition on ‘Spinning’ in FINRA Rule 5131?,” Hedge Fund Law Report, Vol. 4, No. 23 (Jul. 8, 2011).  Regulators are also concerned about investments by different funds at different levels of the capital structure of the same issuer and the conflicts managers face in simultaneously managing such investments to ensure fair treatment for all affected funds.  See, e.g., “Identifying and Resolving Conflicts Arising out of Simultaneous Management of Debt and Equity Hedge Funds,” Hedge Fund Law Report, Vol. 3, No. 10 (Mar. 11, 2010).  With this in mind, the U.S. Securities and Exchange Commission and the U.K. Financial Services Authority recently announced the settlement of charges brought by those regulatory agencies against two affiliated institutional investment managers for failing to appropriately address conflict raised by the side by side management of a mutual fund and hedge fund.  For more on the SEC’s view on such side by side management arrangements, see “Fifth Street No-Action Letter Outlines Factors the SEC May Consider in Approving Joint Participation in a Restructuring by Registered and Private Funds Managed by the Same Manager,” Hedge Fund Law Report, Vol. 3, No. 38 (Oct. 1, 2010).