New York City seeks passive equity, smart beta managers for $56 billion

New York City Retirement Systems issued RFPs for equity index managers and smart beta/alternatively weighted index managers to run a total of up to $56 billion, according to a notice on the website of city Comptroller Scott Stringer, the fiduciary for the five pension funds within the $170.6 billion pension system.

The RFP for equity index managers includes “capitalization weighted indexes, smart beta/alternatively weighted indexes, or any other type of indexed portfolio, such as those based on ESG factors and limits on carbon,” the RFP said. As of Dec. 31, the pension system had about $56 billion in assets invested with equity capitalization-weighted indexes. Current managers must rebid “if they wish to be considered for award of a contract,” the RFP said.

The smart beta search is specifically seeking managers that run smart beta and alternatively weighted index strategies and products covering long-only domestic, developed and emerging markets equities to run up to a total of $4.5 billion, the current amount invested in alternatively weighted strategies. The RFP said current managers must rebid for the services to be considered for inclusion in the search.

The searches will also consider managers for a “pool” that will be eligible to compete for further allocations, the RFPs said.

Interested managers must submit information to Callan Associates, Wilshire Associates and eVestment databases by March 6. Managers will be selected between March and September, with contract start dates in November.

RFPs for both the equity index manager search and the smart beta search are available on the comptroller's website.

Callan Associates, investment consultant for the New York City Employees' Retirement System; NEPC, investment consultant for the New York City Fire Department; Rocaton Investment Advisors, investment consultant for the New York City Teachers' Retirement System; Segal Marco Advisors, investment consultant for the New York City Board of Education; and Wilshire Associates, investment consultant for the New York City Police Department, are assisting in the search.