Avoiding Parallel Fund Conflicts: Specific PE, Real Estate and Private Credit Issues and Mitigation Tips

Each asset class in the private funds industry faces different risks related to parallel funds and conflicts of interest. Hedge funds, for example, are more likely than PE funds to have multiple funds share investment strategies despite being at different stages of their investment cycles. Although PE funds confront those risks less frequently, they can certainly still arise when a fund attempts to add a supplemental round of investors before its final close or when a sponsor raises a new vehicle for a co‑investment. In this article, partner Stephanie Breslow discusses how to best avoid conflicts of interest when managing parallel funds and scenarios in which conflicts may arise.