There are various reasons – such as tax issues, regulatory concerns or investor control – why fund managers decide to launch supplemental funds in parallel with their flagship funds. The problem, however, is that fund managers can focus so intently on curing those issues that they overlook some of the potential conflicts of interest introduced by operating parallel funds. In addition, fund managers may occasionally develop blind spots for when multiple funds operate with sufficiently similar investment strategies to qualify as parallel funds and thus necessitate careful treatment. To bolster industry best practices in this area, the Standards Board for Alternative Investments (SBAI) recently issued a case study (Case Study) focusing on those issues and providing information on other resources available through SBAI. This first article in a two-part series discusses the key takeaways from the Case Study, with added insights from industry practitioners including SBAI executive director Thomas Deinet. The second article will outline different contexts in the hedge fund and private credit sectors where parallel funds can arise, with tips for mitigating conflict of interest risks. See “Will Hedge Fund Industry Self-Regulatory Codes, Such As the ‘Standards’ Promulgated by the Hedge Fund Standards Board, Preempt Additional Hedge Fund Regulation or Complement It?” (Apr. 23, 2009).