Hedge funds must act morally to fit pensions' ethical criteria
Hedge funds looking to market themselves to Scandinanvia's institutional investors do not only need to look at the regulations. They may also need to brush up their skills in ethical investment, or socially responsible investment (SRI), given the fact that many pension funds in Scandinavia have strictly enforced SRI criteria. The SRI criteria may result in extra transparency demands from the pension funds in Scandinavia – regarded as some of the most advanced in hedge fund investing in Europe, if not globally.
Richard Gröttheim, executive vice-president of Sjunde APFonden, the 7th Swedish pension fund (AP7), says the requirements that fund of hedge funds managers had to meet two-and-a-half-years ago, when AP7 was seeking funds of hedge funds, were "quite strict", partly because of SRI policies. Both K2 Advisors and EIM met the requirements and now sit as the fund's two main hedge fund providers. AP7 required weekly transparency as well as reports relevant to AP7's SRI stance. "Back then, funds of
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