The simultaneous management of hedge funds and private equity funds is rife with potential conflicts of interest, including issues relating to allocation of investment opportunities between the funds, possession of material nonpublic information, valuation and allocation of expenses. Conflicts of interest – and whether advisers have appropriately discharged their fiduciary duties to identify and eliminate or mitigate and disclose them – remain top enforcement priorities for the SEC and its Asset Management Unit. See “Regulators from the SEC, CFTC and New York Attorney General’s Office Reveal Top Hedge Fund Enforcement Priorities (Part One of Four),” Hedge Fund Law Report, Vol. 7, No. 45 (Dec. 4, 2014). Accordingly, especially in today’s regulatory environment, managers must be aware of and mitigate such conflicts of interest. This article, the second in a three-part series, discusses operational conflicts arising out of simultaneous management of hedge funds and private equity funds, including conflicts involving the possession of material nonpublic information, valuation, allocation of expenses, personal trading and investors. The first article explored the structural considerations that give rise to potential conflicts; conflicts involving the investments held by each fund; and conflicts with the allocation of investment and disposition opportunities between affiliated hedge funds and private equity funds. The third article will address offshore concerns and ways to mitigate conflicts of interest. See also “Operational Conflicts Arising Out of Simultaneous Management of Hedge Funds and Alternative Mutual Funds Following the Same Strategy (Part Two of Three),” Hedge Fund Law Report, Vol. 8, No. 14 (Apr. 9, 2015).