Key Takeaways
- • The Indiana Public Retirement System (INPRS) board of trustees voted unanimously on Friday to dismiss BlackRock from managing the state's global inflation-linked bond portfolio, according to Indiana Capital Chronicle.
- • The BlackRock-managed portfolio held total assets of $969 million as of October 2024, per an INPRS presentation.
- • Three finalists - State Street ($4.4 trillion in assets), UBS and Northern Trust - were judged capable of comparable service, and the board will select a replacement next.
- • Indiana Treasurer Daniel Elliott alleged BlackRock made illegal ESG commitments; BlackRock said it remains committed to Indiana and its $102 billion invested in the state.
- • The Alliance for Prosperity and a Secure Retirement criticized the decision, saying INPRS staff acknowledged BlackRock had "done a great job" and that fees were low.
Summary
The board of trustees for the Indiana Public Retirement System voted unanimously on Friday to dismiss BlackRock from handling the state's portfolio, according to Indiana Capital Chronicle. The decision followed accusations from Indiana Treasurer Daniel Elliott that BlackRock had made illegal environmental, social and governance (ESG) commitments. Elliott said board members had "voted to put Hoosier public servants first by rejecting BlackRock and woke corporate policies." The vote determined that comparable service providers exist for custom, passive management of global inflation-linked bonds within the INPRS Defined Benefit Plan. Choosing a new provider comes next.
An INPRS presentation said the system issued a request for proposal to identify comparable providers. The BlackRock-managed portfolio had total assets of $969 million in October 2024. Five firms responded, and after finalist interviews, three were found able to provide materially equivalent or materially better financial results. The contenders are State Street, UBS and Northern Trust. All three appear on other states' ESG boycott lists, namely Northern Trust in West Virginia, UBS in Texas and State Street in Oklahoma, and all are members of the Net Zero Asset Managers Initiative. State Street manages $4.4 trillion, the closest of the alternatives to BlackRock's $10.5 trillion.
State Comptroller Elise Nieshalla, one of the nine board members, voted to hire an alternate asset manager. Her news release cited BlackRock SEC filings as evidence of an ESG-focused agenda and praised the firm's recent decision to discontinue its affiliation with Climate Action 100+, while calling for it to end support for Net Zero and similar initiatives.
BlackRock said it was "proud of having helped hundreds of thousands of Hoosiers invest and retire with dignity" and remains committed to Indiana and the $102 billion it has invested in the state on behalf of clients. The Alliance for Prosperity and a Secure Retirement criticized the vote, stating that INPRS staff admitted during the meeting that BlackRock had "done a great job" and that "fees have been low," and warned that political considerations superseded fiduciary duty.
An INPRS presentation said the system issued a request for proposal to identify comparable providers. The BlackRock-managed portfolio had total assets of $969 million in October 2024. Five firms responded, and after finalist interviews, three were found able to provide materially equivalent or materially better financial results. The contenders are State Street, UBS and Northern Trust. All three appear on other states' ESG boycott lists, namely Northern Trust in West Virginia, UBS in Texas and State Street in Oklahoma, and all are members of the Net Zero Asset Managers Initiative. State Street manages $4.4 trillion, the closest of the alternatives to BlackRock's $10.5 trillion.
State Comptroller Elise Nieshalla, one of the nine board members, voted to hire an alternate asset manager. Her news release cited BlackRock SEC filings as evidence of an ESG-focused agenda and praised the firm's recent decision to discontinue its affiliation with Climate Action 100+, while calling for it to end support for Net Zero and similar initiatives.
BlackRock said it was "proud of having helped hundreds of thousands of Hoosiers invest and retire with dignity" and remains committed to Indiana and the $102 billion it has invested in the state on behalf of clients. The Alliance for Prosperity and a Secure Retirement criticized the vote, stating that INPRS staff admitted during the meeting that BlackRock had "done a great job" and that "fees have been low," and warned that political considerations superseded fiduciary duty.
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