University of Illinois System, Champaign, hired BlackRock to run $160 million in an active domestic ESG-based equity strategy for its $720 million endowment, said Geri Melchiorre, director of investments.
The strategy replaces a Dow Jones total stock index fund managed by BlackRock, Ms. Melchiorre said. It is the endowment's largest domestic equity portfolio.
Ms. Melchiorre said in a telephone interview the switch to the active strategy based on environmental, social and governance factors was led by Timothy L. Killeen, the system's president, and the adoption by the system of a set of six guiding principles defining the system's commitment to sustainability.
BlackRock's strategy emphasizes companies rated highly by multiple data providers and its own research that rate highly on ESG criteria within the Russell 3000 index, said Jessica Huang, director, head of Americas and Asia-Pacific platform strategy and innovation at BlackRock.
Ms. Huang said it is an active strategy but investors can use it as a core index fund replacement.
