Hedge Funds May Steer Clear of ESG Designations Over EU Rules

Hedge fund managers and private equity firms may try to steer clear of EU ESG fund designations to avoid any potential legal risks that might stem from misinterpreting the rules.

“There are certainly concerns,” said Anna Maleva-Otto, a partner at Schulte, Roth & Zabel LLP, whose clients are mostly US and UK-based alternative investment managers. “US managers in particular -- because the United States tends to be such a litigious jurisdiction -- are concerned about future investor claims for misselling.”