Key Takeaways
- • New York City Comptroller Mark Levine has reopened the bidding process for pension asset management services, giving BlackRock a chance to retain its mandate, according to Reuters.
- • The city's public pension assets total about $127 billion, of which $80 billion sits in passive index products; BlackRock manages $62 billion of the city's public equities.
- • Levine declined to follow predecessor Brad Lander's November recommendation to drop BlackRock and re-tender index equity portfolios over climate concerns.
- • A Levine spokesperson said "all managers may submit their bids," while BlackRock stressed its long-standing client relationship with the city.
Summary
New York City Comptroller Mark Levine has opened a renewed request for proposals for pension asset management services, a move that gives BlackRock the opportunity to keep managing the city's pension assets despite calls to end the relationship over climate issues, according to Reuters. The city's public assets total about $127 billion, of which $80 billion is in passive index products. BlackRock and State Street manage sizable portions of these funds, with BlackRock accounting for $62 billion of the city's public equities.
The process follows a November recommendation from Levine's predecessor, Brad Lander, that the city pension funds drop BlackRock and re-tender index equity portfolios. Lander cited what he perceived as BlackRock's retreat on climate issues, including the firm pressing fewer companies in its portfolios, at a time when appointees of President Donald Trump had intensified oversight of the financial sector. The latest index-asset service requests were last announced in 2017 and have since rolled over through two successive three-year terms.
When asked whether Levine hopes to extend cooperation with BlackRock, a spokesperson said "all managers may submit their bids to participate in this." BlackRock said it was proud that New York City is a long-standing client and looked forward to continuing the partnership. State Street had not commented at the time of publication. New York City Mayor Zohran Mamdani has not publicly commented on BlackRock, though he has some influence over the city's pension funds and once supported Lander; a spokesperson did not respond to questions on his position.
The situation reflects wider pressure on asset managers from pension funds seeking influence over climate and social issues through proxy voting. In September, the Dutch pension fund PFZW said it would stop investing in BlackRock's equity funds partly over sustainability decisions and ESG votes. Some officials from extractive-rich U.S. states have also considered similar steps. BlackRock and its rivals have responded with programs that let investors influence voting through their own investment services. The final decision on the city's pension asset managers could shape both its asset management arrangements and its stance on sustainability in financial policy.
The process follows a November recommendation from Levine's predecessor, Brad Lander, that the city pension funds drop BlackRock and re-tender index equity portfolios. Lander cited what he perceived as BlackRock's retreat on climate issues, including the firm pressing fewer companies in its portfolios, at a time when appointees of President Donald Trump had intensified oversight of the financial sector. The latest index-asset service requests were last announced in 2017 and have since rolled over through two successive three-year terms.
When asked whether Levine hopes to extend cooperation with BlackRock, a spokesperson said "all managers may submit their bids to participate in this." BlackRock said it was proud that New York City is a long-standing client and looked forward to continuing the partnership. State Street had not commented at the time of publication. New York City Mayor Zohran Mamdani has not publicly commented on BlackRock, though he has some influence over the city's pension funds and once supported Lander; a spokesperson did not respond to questions on his position.
The situation reflects wider pressure on asset managers from pension funds seeking influence over climate and social issues through proxy voting. In September, the Dutch pension fund PFZW said it would stop investing in BlackRock's equity funds partly over sustainability decisions and ESG votes. Some officials from extractive-rich U.S. states have also considered similar steps. BlackRock and its rivals have responded with programs that let investors influence voting through their own investment services. The final decision on the city's pension asset managers could shape both its asset management arrangements and its stance on sustainability in financial policy.
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