The New York City Retirement Systems invested $23.1 billion with minority-owned and women-owned asset management firms, representing 13.3% of total pension fund assets for the fiscal year ended June 30, reported Brad Lander, the city comptroller and custodian of the five pension funds in the city system.
These firms and emerging asset managers “are among the best performers in our portfolio,” Lander said in a Nov. 27 news release describing these firms' role in the pension system which had $274.4 billion in assets for the fiscal year ended June 30. Assets increased to $285.4 billion as of Sept. 30).
The firms' performance during the previous fiscal year "helped us achieve a 10% return that saved taxpayers $1.8 billion," he said. The annual assumed rate of return is 7%.
The minority-owned and women-owned firms accounted for $16.8 billion of total system assets for the fiscal year ended June 30, 2022, and $19.5 billion for the fiscal year ended June 30, 2023, the news release said.
The pension system's performance "shows that anti-DEI rhetoric, which purports that diversity hinders financial performance, is simply false,” said Lander, referring to the policy of diversity, equity and inclusion.
“When we expand the pool of talent, creativity, and innovation among our asset managers, we achieve greater returns for our beneficiaries and invest in a growing economy,” he added.
The pension system also had a total of $10.36 billion “in investments with or committed to emerging manager firms, which do not typically have access to larger institutional investors,” the news release said.
As of June 30, 2024, these investments with emerging manager firms represented a 5.2% increase from the $9.85 billion for the year-ago period.
“Manager diversity is a fundamental component of the fiduciary duty of the New York City retirement systems and integral to enhancing the long-term value of the Systems,” said CIO Steven Meier in the news release.
“These programs not only contribute positively to our portfolio’s returns, but also drive tangible economic impact in historically underserved communities and help narrow the racial wealth gap within financial services,” Taffi Ayodele, director of diversity, equity and inclusion and emerging manager strategy, said in the news release.
