$45bn NYCERS scheme hires four SRI managers

Generation, F&C, Walden and KBC win fund mandates.

Generation Asset Management, F&C Asset Management, Walden Asset Management, and KBC Asset Management have all been hired by the $45bn (€33bn) New York City Employees Retirement Scheme (NYCERS), to run responsible investment mandates. The fund did not reveal the value of the assets awarded to each manager.
Both Generation and F&C will run portfolios of global equities, mostly large cap. Walden will run a primarily US small cap fund. KBC, the Belgian fund manager, will run a portfolio dedicated to alternative energy companies. In September, Responsible Investor revealed that NYCERS was seeking managers to run a sustainable and environmental active management strategy. The fund had also planned to hire an activist equity manager to agitate for change within investee companies. NYCERS manages the pensions of more than 300,000 of New York’s municipal workers.
In an interview with Responsible Investor earlier this year, Michael Musuraca, designated trustee at the fund for the American Federation of State, County, and Municipal Employees (AFSCME), AFLCIO, District Council 37, the largest public sector union in New York City, said the fund had a clear SRI policy: “We call what we doresponsible investment. It is responsible in two ways. Firstly, we put environmental, social and governance issues into our investment decisions. Secondly, we take responsibility for what we do as a fund.” The fund has also been examining its policy on emerging markets investment, where it has three per cent of total equity exposure, to see whether it should mirror a shift by CalPERS, which introduced qualitative criteria to underpin its investments. He said: “Our policy is roughly the same type that CalPERS used to employ, i.e. a permissible list of countries to invest in, but with a previso to managers that says if you find a company in a prohibited country that meets our responsible criteria, then justify it and go ahead and invest in it. We use a combination of traditional financial issues such as liquidity alongside political issues such as a free and independent judiciary, free press, right to association, collective bargaining, and conditions of employment. We’ve done very well in our emerging markets investments as a result. The debate that CalPERS has instigated means that we may need to revisit what we do.” Click here to read September’s NYCERS interview