Key Takeaways
- • New York City Comptroller Mark Levine announced on Friday, June 12, 2026, a search for new asset managers to provide passive indexing of public equity for the city's five public pension systems, which held $127.11 billion in public equity as of March 31.
- • The search follows a recommendation by former comptroller Brad Lander to drop BlackRock and Fidelity over insufficient decarbonization strategies.
- • Applications are due July 15; evaluation weights 40% organizational characteristics and 60% investment management and decision-making, with contracts targeted to start by June 2027.
- • Selected managers will receive at least a three-year contract, with renewal options adding up to six more years.
- • The search seeks market-cap, alternatively weighted, ESG-factor-based, and carbon-limited indexes, provided they fit each system's investment guidelines.
Summary
New York City Comptroller Mark Levine announced that the city's pension funds will search for new asset managers to provide passive indexing of public equity stocks across the city's five public pension systems, according to a June 12 press release cited by ESG Dive. The five systems, which include the NYC Employees Retirement System, the Teachers' Retirement System, the Board of Education Retirement System, and the city fire and police pension funds, held $127.11 billion in public equity investments as of March 31, with the majority invested in passive index products. The city last solicited public equity index services in 2017.
The search follows a recommendation by former comptroller Brad Lander that the city drop BlackRock and Fidelity over unsatisfactory decarbonization strategies. Under Lander, the pension funds requested written decarbonization plans from all asset managers. BlackRock, Fidelity and PanAgora were found insufficient, though PanAgora was later removed from the recommended-drop list after submitting an enhanced net-zero plan. In April net-zero progress reports, NYCERS, the Board of Education and the Teachers' Retirement System said BlackRock remains insufficiently aligned with their expectations, and NYCERS said the same of Fidelity.
Three of the systems have targets to reach net-zero across their portfolios by 2040. Each surpassed interim targets to reduce scope 1 and scope 2 financed emissions intensity, with a weighted average reduction of 48.13% between 2019 and 2025, according to Levine's office.
Applications are due July 15. Submissions will be scored 40% on organizational characteristics, including team structure, diversity, operations and the nature and size of managed assets, and 60% on investment management and decision-making, including investment philosophy, risk management and portfolio characteristics. Evaluation, interviews and selection are expected to run from September 2026 to March 2027, with contracts funded and started by June 2027. Selected managers will receive at least a three-year contract, with renewal options up to an additional six years.
Levine said the review is necessary to deliver strong returns, adding, "We cannot keep these relationships on autopilot." Ben Cushing, sustainable finance campaign director at Sierra Club, said the search offers an opportunity to put the city's climate-risk standards into action, and that passive managers' stewardship, proxy voting and engagement responsibilities should not be weakened.
The search follows a recommendation by former comptroller Brad Lander that the city drop BlackRock and Fidelity over unsatisfactory decarbonization strategies. Under Lander, the pension funds requested written decarbonization plans from all asset managers. BlackRock, Fidelity and PanAgora were found insufficient, though PanAgora was later removed from the recommended-drop list after submitting an enhanced net-zero plan. In April net-zero progress reports, NYCERS, the Board of Education and the Teachers' Retirement System said BlackRock remains insufficiently aligned with their expectations, and NYCERS said the same of Fidelity.
Three of the systems have targets to reach net-zero across their portfolios by 2040. Each surpassed interim targets to reduce scope 1 and scope 2 financed emissions intensity, with a weighted average reduction of 48.13% between 2019 and 2025, according to Levine's office.
Applications are due July 15. Submissions will be scored 40% on organizational characteristics, including team structure, diversity, operations and the nature and size of managed assets, and 60% on investment management and decision-making, including investment philosophy, risk management and portfolio characteristics. Evaluation, interviews and selection are expected to run from September 2026 to March 2027, with contracts funded and started by June 2027. Selected managers will receive at least a three-year contract, with renewal options up to an additional six years.
Levine said the review is necessary to deliver strong returns, adding, "We cannot keep these relationships on autopilot." Ben Cushing, sustainable finance campaign director at Sierra Club, said the search offers an opportunity to put the city's climate-risk standards into action, and that passive managers' stewardship, proxy voting and engagement responsibilities should not be weakened.
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