Simultaneously managing a hedge fund and a private equity fund is fraught with potential conflicts of interest, both structural and operational. These considerations become even more complex when applied to offshore concerns. It is crucial for managers to identify and eliminate or mitigate and disclose such conflicts, especially in light of the SEC's continued focus on them. See “ACA Compliance Professionals and SEC Veteran John H. Walsh Share Insights on SEC Priorities for 2015
,” Hedge Fund Law Report, Vol. 8, No. 16 (Apr. 23, 2015). This article, the third in a three-part series, addresses offshore concerns and ways to mitigate conflicts of interest arising out of the simultaneous management of hedge funds and private equity funds. 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 second article
discussed 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. See also “How to Mitigate Conflicts Arising Out of Simultaneous Management of Hedge Funds and Alternative Mutual Funds Following the Same Strategy (Part Three of Three)
,” Hedge Fund Law Report, Vol. 8, No. 15 (Apr. 16, 2015).