For some time, conventional wisdom has held that where an investment manager manages hedge and mutual funds simultaneously, the manager will have an incentive to favor the hedge fund with better investment opportunities, and to direct the less interesting opportunities to the mutual fund.  The source of this supposed favoritism was fees: since the total fees paid by the hedge fund to the manager are higher than the fees paid by the mutual fund, the manager would stand to collect greater total fees by directing the better opportunities to the hedge fund.  The manager’s fiduciary duty to all of its funds was understood to mitigate this incentive – but not to eliminate it, especially in the closer, harder-to-monitor cases.  However, a new study upends the conventional wisdom.  We detail the findings from that study and what it may mean for hedge fund managers.  We also discuss issues arising from the management by one hedge fund manager of multiple hedge funds with different investor bases – one consisting of outside investors and the other consisting of principals and employees of the manager.