NYC Pensions to Demand Diversity Data from Managers

Firms interested in doing business with the funds will have to reveal staff demographics, according to the city’s comptroller.

New York City’s five pension funds will begin demanding staff demographic data from potential service providers to encourage diversity, Comptroller Scott Stringer announced at the system’s May 1 investment conference. 

“For the first time—working with trustees—we’re asking firms that want our business to give us hard data about the composition of their investment teams and professionals,” he told to audience of investment professionals, internal staff, and media. 

This information, gathered by surveys, is to become a formal criterion for determining which managers are most likely to outperform on a long-term risk-adjusted basis. The many consultants that assist in manager selection have likewise been instructed to consider diversity as a meaningful attribute. 

“We’re doing this to add value to our funds, and the new information will help us select managers in the future,” Stringer continued. “Let me stress: This is a game-changing expansion of our commitment to opportunity.”

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The $160 billion retirement system currently has $10.9 billion invested with minority and women managers, Stringer said. But since taking over the office in late 2013, Stringer and the pension funds’ CIO Scott Evans have made a broader push for diversity. 

Stringer’s office recently graded City agencies on how well they engaged women and minority-owned firms for municipal contracts. He gave the retirement system a ‘C’—just a shade better than the ‘D’ averaged citywide. 

“When we expand the pool of people with whom we do business, it strengthens our funds. And it improves fiscal performance,” Stringer told the conference attendees. “It’s got to be a living, breathing part of how we do business.” 

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Ex-Brown CIO to Lead E&F Outsourcing at Mercer

Kenneth Shimberg, the former interim CIO for Brown University’s endowment, will begin his new post on May 4.

Ken ShimbergKenneth Shimberg, Brown UniversityMercer has appointed Kenneth Shimberg as its inaugural chief for endowment and foundation (E&F) outsourced-CIO (CIO) services.

Shimberg, who has been investing for Brown University’s $3 billion endowment since 2001, will begin his new post on May 4. He will be based in Boston, Mercer said, and will report to Stan Mavromates, CIO for the Americas business.

In addition to his position as CIO of the E&F outsourcing business, Shimberg will serve as chair of the investment committee focused on developing strategy and tactics for nonprofit portfolios.

“As our E&F business continues to grow, we felt creating this role for Ken would enhance the level of service we bring to our client base,” Mavromates said.

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According to CIO’s 2015 OCIO Buyer’s Guide, Mercer had 809 clients and more than $100 billion in total assets under discretionary management as of September 30, 2014. Of these, $4.58 billion belonged to endowments and foundations.

Shimberg will also guide the firm’s nonprofit client base, “using his insights and substantial investment experience to continually improve Mercer’s ability to reach successful outcomes for these organizations,” the firm said.

During his nearly 14-year tenure as Brown’s managing director, Shimberg was tapped as interim CIO from October 2012 to June 2013.

He previously worked at the Princeton University Investment Company as a principal. Shimberg also spent time at real estate consulting firm Nassau Capital building private equity portfolios and at JP Morgan in the structured financial group.

“With nearly 20 years working and leading in a university investment office, Ken brings the skills and intense knowledge necessary to address the challenges faced by endowments, foundations, and other not-for-profit investors,” said Kim Wood, Mercer’s national practice leader for nonprofit clients.

Shimberg has a bachelor’s degree in management science from the Massachusetts Institute of Technology.

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