In summary…
People often associate hedge fund secrecy with quant funds and the so-called black box[1]… now welcome to the green box.
Hedge funds are inherently private organisations. This is arguably linked to their intellectual property – a proprietary investment process and idiosyncratic strategy. Also, their legal structures and choices of jurisdiction means that they may have fewer disclosure requirements compared to mutual funds.
Sustainable finance disclosure regulation (“SFDR”) aims to tackle clarity and accountability issues, but there are teething issues, leaving many fund managers in the dark when trying to satisfy these new regulations.
The lack of standardisation, or agreement on what ESG investing actually looks like, is clearly a significant hurdle. But with significant due diligence, research and a clear understanding of the issues, these hurdles are not insurmountable.
