The financial advisor for New York City’s pension funds wants them to come up with a more extensive questionnaire for external money managers about their diversity.
At a Wednesday meeting of the city’s five pension funds (teachers, employees, and board of education systems, plus the police and firefighters), Alex Doñe, chief investment officer of the New York City Bureau of Asset Management, the advisory organization, said they are looking at how to improve the questionnaire.
Board members asked whether the current questionnaire is lacking in specifics of how its money managers address the topic.
One board member compared the diversity section to the Institutional Limited Partners Association’s standardized due diligence questionnaire as a model for the funds’ survey.
David Kazansky, a Teachers’ Retirement System board member, said the diversity responses in New York’s section is “vastly different” from manager to manager. “There was one manager that we saw breakdowns in percentage of hires and so on and so forth, and then with another manager it was, ‘Yeah, diversity’s great,’ he said, adding that the city needs consistency from these answers.
Last year, city Comptroller Scott Stringer added new due diligence policies for its investment managers, making New York City the first public pension system to ask all managers to disclose the diversity and compensation levels of their teams if they wanted to be considered.
Some of these included asking fund managers if the companies they invest in keep policies that agree with non-discrimination laws and if they have internal non-discrimination policies.
About 85% of private market managers have complied with the bureau’s questionnaire, as well as all of its public managers. Doñe confirmed that all primary managers are responding to the template. The compliance questionnaire goes out each May to existing managers, and new managers must complete it after they have been chosen.