In response, BlackRock refused the board's demand to abstain from voting the plan's proxies, resulting in MOSERS selling off all of its equity holdings with BlackRock.
These funds are now primarily managed through contracts held by NISA Investment Advisors, a St. Louis-based investment manager. According to its website, as of Sept. 30 NISA managed $252 billion in physical assets, of which 96% are fixed income portfolios comprised mostly of U.S. Treasury and investment grade credit securities; and $174 billion in derivatives portfolios.
"This is the right thing to do for Missouri state employees who rely on the assets managed by MOSERS for their retirement," said Scott Fitzpatrick, Missouri state treasurer, in the release. "Fiduciary duty must remain the top priority for investment managers — a duty some of them have abdicated in favor of forcing a left-wing social and political agenda that has failed to succeed legislatively, on publicly traded companies."
Mr. Fitzpatrick added: "MOSERS has an obligation to manage its assets in a way that prioritizes providing maximum possible returns for retirees and taxpayers. We should not allow asset managers such as BlackRock, who have demonstrated that they will prioritize advancing a 'woke' political agenda above the financial interests of their customers, to continue speaking on behalf of the state of Missouri. It is past time that all investors recognize the massive fiduciary breach that is taking place before our eyes and do something about it."
The Missouri State Treasurers office also noted in the release that large asset managers such as BlackRock have begun to "exercise the immense power they have amassed, even bragging about it publicly, to advance political causes which sacrifice return on investment for their customers."
Proxy voting, the state treasurer's office noted in the release, "allows shareholders in companies to have a say in decisions on issues facing publicly traded companies and vote in elections for board members. Proxy voting power has historically been delegated to asset management firms who hold stock in companies on behalf of MOSERS, and millions of other investors, with the expectation that those firms would exercise those votes with their fiduciary obligation to maximize value for the retirement system and its beneficiaries being the sole consideration."
A BlackRock spokesman said by email: "BlackRock has built its business on providing our clients choice to reflect their unique goals and preferences. While the actions of some elected officials have attracted media headlines, they do not reflect the totality of our clients' investment decisions. For example, clients have awarded BlackRock $248 billion of net new long-term assets this year, including $84 billion in the third quarter in the U.S. alone. We remain committed to offering our clients choice and delivering them the best financial outcomes consistent with their preferences."
The BlackRock spokesman added: "The foundation of BlackRock is providing choice to our clients. This extends to proxy voting where we believe every investor should have easy and efficient options to participate if they choose."
Missouri's decision followed a similar move announced in early October by Louisiana Treasurer John Schroder to pull $794 million from BlackRock funds over ESG concerns.
MOSERS had $9.5 billion in assets as of March 31.
MOSERS spokeswoman Candy Smith could not be immediately reached for further details.
