What is a requirement for Side-by-Side Management?

Side-by-Side Management refers to a scenario in which an investment adviser manages different types of investment vehicles, such as mutual funds and hedge funds, at the same time. This approach can raise potential conflicts of interest because the adviser must navigate the different needs and priorities of the two fund types.

Managing both mutual funds and hedge funds simultaneously allows investment advisers to allocate opportunities and resources, managing the funds in a way that meets diverse investment goals. In this context, transparency and adherence to regulatory requirements become essential to mitigate potential conflicts that may arise from preferential treatment of one fund type over another. Therefore, the requirement for Side-by-Side Management is inherently linked to the practice of managing these distinct investment vehicles concurrently.

The other choices reflect strategies or practices that do not encompass the core requirement of simultaneously managing multiple fund types under Side-by-Side Management. Hence, they do not capture the essence of this investment strategy.