Key Takeaways
- • The New York City Comptroller, overseeing more than $306bn for the five New York City public pension systems, has issued a tender notice for two passive equity mandates, the most significant overhaul of its manager line-up in nearly a decade.
- • BlackRock currently manages $61.06bn and State Street $26bn for the five systems, with contracts for all five pension funds now at stake, per Net Zero Investor.
- • Eligible managers must offer separate accounts, fully invested portfolios and no ETF-based solutions, with an initial three-year term renewable for up to nine years; applications close 15 July.
- • The review follows former Comptroller Brad Lander's 2025 recommendation to drop BlackRock over stewardship concerns, while current Comptroller Mark Levine has avoided explicit climate references.
Summary
The Office of the New York City Comptroller, now led by Mark Levine, has issued a notice of search for asset managers to provide passive indexing services, according to a note seen by Net Zero Investor. The tender covers two key passive equity mandates in a portfolio that oversees more than $306bn in investment assets for the five New York City public pension systems. BlackRock currently manages $61.06bn and State Street $26bn for the systems. The Comptroller last reviewed its passive mandates in 2017, making the current exercise the most significant overhaul of its manager line-up in nearly a decade.
The tender permits incumbents to reapply but also opens the process to other managers. The office is seeking capabilities in capitalization-weighted equity index strategies, smart beta, alternative-weighted index strategies, ESG index portfolios and low-carbon index portfolios. Managers must offer separate accounts, fully invested portfolios and no ETF-based solutions. The mandate would run for an initial three years, with prospects to renew for up to nine years. Applications are due by 15 July.
The review follows a recommendation by former Comptroller Brad Lander last year to drop BlackRock, citing concerns that its stewardship approach did not align with the pension funds' net zero ambitions. Lander had previously described State Street as more responsive. While Lander had urged termination of a $42bn BlackRock mandate covering two funds, the scope now extends to all five pension funds. Levine said that fulfilling the mandate of delivering strong returns "requires ongoing review of our contractual relationships with each of our asset managers," adding that "we cannot keep these relationships on autopilot."
BlackRock told Net Zero Investor that it was proud to be a long-standing client of New York City and looked forward to continuing its work. State Street declined to comment. Climate campaigners welcomed the review, with Stand Earth's Richard Brooks calling it long overdue, while New York Communities for Change urged a shift of business to firms with stronger climate records. The Comptroller is the latest major asset owner to review its managers after European investors, including the People's Pension, which has divested $28bn from State Street, and Dutch funds PME and PGGM, made similar moves.
The tender permits incumbents to reapply but also opens the process to other managers. The office is seeking capabilities in capitalization-weighted equity index strategies, smart beta, alternative-weighted index strategies, ESG index portfolios and low-carbon index portfolios. Managers must offer separate accounts, fully invested portfolios and no ETF-based solutions. The mandate would run for an initial three years, with prospects to renew for up to nine years. Applications are due by 15 July.
The review follows a recommendation by former Comptroller Brad Lander last year to drop BlackRock, citing concerns that its stewardship approach did not align with the pension funds' net zero ambitions. Lander had previously described State Street as more responsive. While Lander had urged termination of a $42bn BlackRock mandate covering two funds, the scope now extends to all five pension funds. Levine said that fulfilling the mandate of delivering strong returns "requires ongoing review of our contractual relationships with each of our asset managers," adding that "we cannot keep these relationships on autopilot."
BlackRock told Net Zero Investor that it was proud to be a long-standing client of New York City and looked forward to continuing its work. State Street declined to comment. Climate campaigners welcomed the review, with Stand Earth's Richard Brooks calling it long overdue, while New York Communities for Change urged a shift of business to firms with stronger climate records. The Comptroller is the latest major asset owner to review its managers after European investors, including the People's Pension, which has divested $28bn from State Street, and Dutch funds PME and PGGM, made similar moves.
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