The same fund family may sponsor both passive and active funds. Due to the funds’ different fee structures and flow sensitivity to performance, this may create conflicts of interest at the fund family level. Using portfolio firms’ mergers and acquisitions as a laboratory, I show that fund families actively take measures to improve the performance of their active funds by using their passive funds. When the family’s active funds have a large stake in the acquirer, the passive fund owners of the target are less likely to support takeover deals that benefit target shareholders. At the deal level, I do not find evidence that takeover premia are affected by passive funds’ voting. Consistent with family profit motives driving fund performance, I observe differences in the flow to performance sensitivity between active and passive funds. The evidence suggests that fund families may take measures to boost their active funds’ performance at the expense of their passive funds.