Smaller hedge fund managers – those just starting up or accelerating; those courting or deploying seed capital; or those spun out of banks or other managers, for example – typically consider sharing office space with other hedge fund managers.  It’s an arrangement with ample precedent and identifiable business advantages, but with obvious and not-so-obvious legal, regulatory and operational risks.  This article is the first in a three-part series identifying those risks and outlining strategies for minimizing them.  This article defines office sharing, outlines its mechanics and catalogues the four primary business reasons for office sharing by hedge fund managers.  The subsequent articles in the series will focus on legal and regulatory risks, the compliance value of physical barriers, security of paper and electronic files, employee training, selection of office partners, confidentiality and nondisclosure agreements, cybersecurity, allocation of costs and risks, the role of prime brokers in office sharing arrangements and how managers sharing office space should negotiate on-site due diligence visits from institutional investors.  See “Operational Due Diligence from the Hedge Fund Investor Perspective: Deal Breakers, Liquidity, Valuation, Consultants and On-Site Visits,” Hedge Fund Law Report, Vol. 7, No. 16 (Apr. 25, 2014).  Taken together, the articles in this series are intended to provide an issue spotting checklist to smaller hedge fund managers so that such managers can capture the benefits of office sharing while avoiding the pitfalls.  For a related discussion, see “Six Privacy-Related Topics to Be Covered by a Hedge Fund Manager’s Compliance Policies and Procedures (Part Three of Three),” Hedge Fund Law Report, Vol. 7, No. 20 (May 23, 2014).