In the event, Interior Minister Elisabeth Baume-Schneider said the bill would have “damaged the reputation of Switzerland as a financial center,” while Kathrin Bertschy of the Green Liberals said annulling State Street’s contract would hurt the perception of legal certainty. US money managers are now navigating a political landscape in which they can be blacklisted from either side of the ESG debate. Late last year, BlackRock, Vanguard Group Inc. and State Street were all sued by a group of states led by Texas for allegedly breaking antitrust law by adopting environmental strategies that hurt the supply of coal. The suit alleges that those investment policies drove up electricity prices. For hedge funds, such developments have coincided with a clear decline in enthusiasm for ESG strategies. For example, a once-popular fund class under the European Union’s Sustainable Finance Disclosure Regulation, known as Article 8, has now fallen out of favor, Firth at Simmons & Simmons said. While insisting that “ESG is far from dead,” Firth said hedge funds now find it more convenient to keep segregated accounts for such holdings. Separately managed accounts (SMAs), which are an “entirely private” vehicle between an asset allocator and a fund manager, “are an increasingly common way for hedge fund mangers to deliver strategies to allocators,” he said.