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“Investment Conflicts Arising Out of Simultaneous Management of Hedge Funds and Private Equity Funds,” The Hedge Fund Law Report

In a May 7, 2015 article, The Hedge Fund Law Report quoted Brian Farmer on the issue of investment conflicts arising out of simultaneous management of hedge funds and private equity funds. As private fund managers seek to diversify their product offerings and lines of business, management companies are increasingly operating hedge funds and private equity funds simultaneously. However, such simultaneous management gives rise to potential conflicts of interest. According to Farmer, there could be conflicts involving the interaction between the investments held by each fund. “One of the big worries with having the hedge fund invested in an opportunity alongside the private equity fund is that there could be pressure to either sell the asset too soon to create liquidity for the hedge fund, or to hold on to the asset too long to create value for the private equity fund objectives.”

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Kristen M. Chatterton

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