Fund managers may choose to use affiliates to provide certain services that are otherwise performed by third-party service providers, including portfolio company management, property management, due diligence, accounting and valuation. The practice is particularly pervasive among real estate fund managers, as they often have vertically integrated structures that result in related-party servicing of assets (e.g., property management, construction management). Similarly, PE sponsors frequently rely on operating partners to manage (or provide other services to) their portfolio companies. Some advisers view using affiliates as a selling point, believing it provides additional value to their clients and investors. That said, the use of affiliates can create actual and perceived conflicts of interest that need to be properly disclosed and managed to ensure advisers fulfill their fiduciary duties to investors and avoid SEC scrutiny. In a guest article, Erando Halilaj and Olivia Eori, vice presidents at Duff & Phelps, identify key considerations for real estate and PE fund managers when charging fees for affiliate service providers and potential solutions they can adopt going forward, including proper benchmarking analysis of third-party fees. See “Compliance Considerations for PE Firms Engaging Operating Partners” (May 14, 2019).