Following the philosophy that pension investors with more diverse teams perform better, New York City pension funds will be increasing the diversity of their investment staff thanks to the addition of a Diversity Working Group in Comptroller Scott Stringer’s Bureau of Asset Management office. The group was announced at the office’s annual conference for investment managers.
The Diversity Working Group’s internal staff will seek to improve investment outcomes through diversity, and will also execute new strategies for employment, investment manager selection, and supplier diversity. It will work in consultation with Office of the Comptroller’s Equal Employment Opportunity (EEO), Bureau of Administration, and Chief Diversity Officer.
“Diversity isn’t a box to be checked, it’s a strategy for economic success. Diverse perspectives matter, and companies that embrace that ethos perform better,” Stringer said in a press release. “That’s why protecting hundreds of thousands of New Yorkers’ retirement security goes hand-in-hand with supporting M/WBEs, diversifying boardrooms, and more.”
The inspiration for the new group’s creation comes from Stringer’s research on how diversity has assisted in the 25% growth of the Pension Funds’ portfolio since 2013. With $175 billion in assets under management, the amount allocated to M/WBE managers has increased 25% since 2013.
Stringer also noted that the city’s pension funds are also the first public retirement system to ask every investment manager for diversity in their leadership and investment teams.
He will seek to strengthen the office’s “graduation policy” and create additional incentives to allocate more funds directly to successful smaller firms, which includes M/WBE managers.
He strongly encouraged incorporating goal setting for all public equity and fixed income investment managers to increase the use of M/WBE brokers 20% to 25%.
Lastly, Stringer said that since the late 2014 launch of the “Boardroom Accountability Project,” a global campaign which gives shareowners a voice in choosing who sits on a company’s board through a “proxy access,”— more than 400 companies have chosen to participate in this model (initially only six were involved). In addition, 17 companies that saw issues with board diversity have now added a woman or person of color to their fold.
“Today, we’re doubling down on that model, and we’re working to ensure the firms we work with and those who invest our pension dollars reflect the extraordinary diversity of New York,” he said.
Comptroller Stringer also announced the recipients of the 2017 Diverse Practitioner Award: Neuberger Berman and Vista Equity Partners.