Key Takeaways
- • NYC Comptroller Mark Levine opened a public rebidding process on Friday, June 12, for New York City pension public equity index mandates, and BlackRock is not excluded from bidding, according to Reuters.
- • The city's pension funds hold roughly $127 billion in public equity investments, of which $80 billion is in passive index products; BlackRock manages $62 billion across all public equities for the city.
- • The rebid follows a November recommendation by former Comptroller Brad Lander that the funds drop BlackRock over its retreat on climate concerns; Levine has not adopted that call.
- • Winning bidders must still meet the funds' existing climate standards, and the mandates were last solicited in 2017 and renewed for two three-year terms.
Summary
New York City Comptroller Mark Levine has opened a rebidding process for New York City pension fund public equity index services, giving BlackRock a fresh opportunity to retain the mandates despite pressure to remove the asset manager, according to Reuters. The move departs from the recommendation of Levine's predecessor, Brad Lander, who in November urged the city's major pension funds to drop BlackRock and rebid its public equities index mandates in response to what he viewed as the firm's retreat on climate concerns. Lander argued that BlackRock was putting less pressure on portfolio companies as appointees of U.S. President Donald Trump gained oversight of the finance industry.
The pension funds hold about $127 billion in public equity investments, of which $80 billion is in passive index products. BlackRock and State Street are major managers of those assets, with BlackRock overseeing $62 billion across all public equities for the city. Bids for the public equity index services were last solicited in 2017 and renewed for two three-year terms by pension boards, which makes the current rebid a potentially significant inflection point for the assets.
A spokesperson for Levine said that "all managers are welcome to bid." In a statement, Levine said, "We cannot keep these relationships on autopilot. I look forward to working with my fellow trustees to ensure we select the managers that meet our highest standards of performance." Winning bidders will still need to meet the funds' existing climate standards. Mayor Zohran Mamdani, who also has influence over the pension funds and once campaigned as a Lander ally, has not commented on BlackRock, and his office has not responded to questions on the matter. State Street did not immediately comment.
BlackRock said in an emailed statement that New York City is a long-standing client and that it looks forward to continuing its work for the city's public employees. The dispute reflects broader tension in the industry: Dutch pension fund PFZW stopped investing in BlackRock-managed stock funds in September over concerns about the firm's sustainability voting record, while some Republican officials, including from fossil-fuel-producing states, have taken similar steps accusing BlackRock and others of overemphasizing those issues. BlackRock and rivals have also built programs that let investors influence proxy voting directly.
The pension funds hold about $127 billion in public equity investments, of which $80 billion is in passive index products. BlackRock and State Street are major managers of those assets, with BlackRock overseeing $62 billion across all public equities for the city. Bids for the public equity index services were last solicited in 2017 and renewed for two three-year terms by pension boards, which makes the current rebid a potentially significant inflection point for the assets.
A spokesperson for Levine said that "all managers are welcome to bid." In a statement, Levine said, "We cannot keep these relationships on autopilot. I look forward to working with my fellow trustees to ensure we select the managers that meet our highest standards of performance." Winning bidders will still need to meet the funds' existing climate standards. Mayor Zohran Mamdani, who also has influence over the pension funds and once campaigned as a Lander ally, has not commented on BlackRock, and his office has not responded to questions on the matter. State Street did not immediately comment.
BlackRock said in an emailed statement that New York City is a long-standing client and that it looks forward to continuing its work for the city's public employees. The dispute reflects broader tension in the industry: Dutch pension fund PFZW stopped investing in BlackRock-managed stock funds in September over concerns about the firm's sustainability voting record, while some Republican officials, including from fossil-fuel-producing states, have taken similar steps accusing BlackRock and others of overemphasizing those issues. BlackRock and rivals have also built programs that let investors influence proxy voting directly.
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