Pensions executives are pushing ahead with diverse and emerging manager programs even amid backlash to diversity, equity and inclusion policies on a national scale.
“We are going to keep doing it regardless of what happens in Washington,” said Brad Lander, New York City comptroller and custodian of the five pension funds in the city system, speaking on Dec. 17 at the 100 Women in Finance FundWomen conference at the New York Stock Exchange.
The New York City Retirement Systems has 13.3% of total pension fund assets, or $23.1 billion, invested with minority-owned and women-owned asset management firms, as of the fiscal year ended June 30.
When Lander started almost three years ago, the system was not clearly reporting its data on diverse managers. The system hired Taffi Ayodele in 2022 as director of diversity, equity and inclusion and emerging manager strategy for the bureau of asset management and first reported the same year that 11.65% of U.S. based actively managed assets for the five pension funds were managed by firms owned by women and people of color.
Lander said the system is on a path of getting to 20% by the end of decade. He noted that these managers “outperform our portfolio across our asset classes.”
Asked by moderator Kerry Kennedy, whose brother Robert Kennedy Jr. has been put forward by president-elect Donald Trump for health secretary, about the political climate around DEI, Lander said it has become a culture war.
“It's a violation of the basic concept that investors ought to be able to manage for risk and return… it's an assault on U.S. capital markets, in addition to being an assault on gender equity, but it is having a very real effect,” he said, adding that his office would keep pushing and “so far, we haven’t seen anything that would restrict our ability to do it. We built our program with an eye to making sure it is legally sound.”
New Jersey also pushing ahead
On another panel, Shoaib Khan, director, CIO of New Jersey Treasury's Division of Investment said his system is also pushing ahead with its emerging manager program which launched two years ago starting with private markets covering private equity and real estate. The system is adding private credit next and is now they are exploring the public market side.
“We are expanding this program,” he said.
Khan argued that emerging manager programs are not concessionary. “If it was, public pension funds would certainly, we would not be able to participate and launch a program if that was the case.”
Khan pointed to getting the program off the ground and the growth in emerging managers wanting to participate in their symposium going from 500 participants in the first year to 800 this past June.
“It’s a direction and path we need to continue to go down,” he said.
