Credit fund managers must be keenly aware of the conflicts of interest that often go hand-in-hand with their strategies. This was one of the principal findings of a recent report issued by Ropes & Gray, which surveyed 100 credit fund managers in cooperation with Debtwire. In a recent webinar, Ropes & Gray partners James R. Brown, Eva Ciko Carman, Alyson Brooke Gal and Jessica Taylor O’Mary explained the survey results and key takeaways from the Ropes & Gray Credit Funds Forum. Our two-part series summarizes the report’s findings and the webinar speakers’ insights. This second article examines a variety of conflicts of interest that frequently arise for credit managers, the forms of leverage these managers are using, the types of issues that investors subject to the Employee Retirement Income Security Act of 1974 raise for credit managers and specific issues that arise for these managers when being examined by the SEC. The first article discussed the types of credit strategies offered by the survey participants, challenges currently facing credit funds and the types of fund structures adopted by credit fund managers – including “season and sell” structures, treaty funds, business development companies and blockers – when engaging in a direct lending strategy. See our three-part series on conflicts arising out of simultaneous management of hedge funds and private equity funds: “Investment Conflicts” (May 7, 2015); “Operational Conflicts” (May 14, 2015); and “How to Mitigate Conflicts” (May 21, 2015).