The five New York City retirement systems have collectively invested or committed $23.08 billion with minority and women-owned business enterprises, as of June 30, accounting for 13.33% of their U.S.-based actively managed assets, according to a recent report from the Office of the New York City Comptroller.
Those figures are up from $19.5 billion and 12.7% one year ago and $16.8 billion and 11.6% in 2022.
Slightly less than half, or $10.36 billion, of the MBWE investments in 2024 were allocated to emerging managers, many of whom are diverse-owned, the comptroller’s office said, adding that emerging managers typically do not have access to larger institutional investors. This is up from $9.85 billion in 2023.
“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,” Steven Meier, CIO of the New York City Retirement System, said in a statement. “It is correlated with improved investment outcomes—and evidence continues to show this.”
According to the comptroller’s office, private markets MWBE firms in the funds’ portfolio have outperformed their respective benchmarks with an average public markets equivalent spread of 5%.
“Our MWBE and emerging asset managers are among the best performers in our portfolio,” New York City Comptroller Brad Lander said in a statement. “Their performance this year helped us achieve a 10% return,” he said, adding that “this year’s strong returns [show] that anti-DEI rhetoric, which purports that diversity hinders financial performance, is simply false.”
The report, the first edition of which was published in 2022, details the comptroller’s office’s investments and work with minority- and women-owned investment firms, emerging managers and MWBE professionals in municipal finance. According to the comptroller’s office, the report is not only intended to increase transparency and accountability, but also to show that “ongoing political attacks” on diversity, equity and inclusion, as well as environment, social and governance considerations, are “misguided.”
According to the report, the comptroller’s office expects attacks on DEI and ESG initiatives to grow, adding that some investors are rolling back their programs and compounding an “already challenging investment environment” for MWBE and emerging manager firms.
“As influential investors, we reject the outdated misconception that prioritizing diversity undermines performance,” Meier said in the statement. “Instead, we intentionally champion diversity as a strategic imperative, setting a powerful example for the industry to follow.”
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Tags: Brad Lander, DE&I, diversity equity inclusion, environment social and governance, ESG, minority and women-owned business enterprises, MWBE, New York City pension, Steven Meier
