Key Takeaways
- • PME Pensioenfonds, a Dutch pension fund with $70 billion in assets, terminated a $5.9 billion equity mandate with BlackRock, citing misalignment with its ESG framework, according to the fund's announcement on Monday.
- • PME began reviewing the relationship in January, following BlackRock's departure from the Net-Zero Asset Managers Initiative.
- • Going forward, PME will rely on only two managers for its equity portfolio: UBS Global Asset Management and MN, a move the fund says will lower its costs.
- • The decision follows similar ESG-related terminations by European allocators, including PFZW's exit of BlackRock, AQR and Legal & General in September.
- • BlackRock said it manages more than €350 billion for Dutch clients and has served PME for more than a decade.
Summary
PME Pensioenfonds, a Dutch pension fund with $70 billion in assets, has terminated a $5.9 billion equity mandate with BlackRock due to what it describes as the manager's misalignment with the fund's environmental, social and governance framework, the fund announced on Monday. According to the release, PME began reviewing its relationship with BlackRock as early as January, after the firm left the Net-Zero Asset Managers Initiative, a collective that sought to achieve net-zero portfolio emissions by 2050. The initiative paused operations following BlackRock's departure, which was among the most prominent exits.
PME stated that it aims for a portfolio with a limited number of stocks to better understand its investments and balance risk, return and sustainability, and that it carefully selects and evaluates external managers accordingly. The fund began defining its ESG goals in 2022, later evolving them into an ESG framework and an index portfolio it calls the Portfolio of Tomorrow. PME said BlackRock had provided high-quality services for many years, but that it also considers which managers best align with that vision.
Going forward, PME will rely solely on UBS Global Asset Management and MN, an investment manager based in The Hague, for its equity investments. PME said the consolidation to two managers will also lower its costs. A BlackRock spokesperson said the firm manages more than €350 billion for Dutch clients and was grateful to have served PME for more than a decade.
PME is the latest European allocator to terminate a mandate over ESG misalignment. PFZW, the Dutch pension fund for the care and welfare sector, terminated BlackRock, AQR Capital Management and Legal & General Investment Management in September. In March, AkademikerPension terminated a 3.2 billion Danish krone ($503 million) mandate with State Street, and The People's Pension terminated a 28 billion pound ($37.42 billion) mandate with State Street, awarding the business to Invesco and Amundi. In the U.S., BlackRock has also lost a fixed-income mandate from the Indiana Public Retirement System over its ESG commitment.
Alasdair Docherty, a sustainable finance and data analyst at the Institute for Energy Economics and Financial Analysis, said in a statement that large pension funds increasingly view climate change as a systemic financial threat to long-term portfolio values. In November, New York City Comptroller Brad Lander called for the city's $308.3 billion pension system to drop BlackRock, Fidelity and PanAgora Asset Management over climate expectations.
PME stated that it aims for a portfolio with a limited number of stocks to better understand its investments and balance risk, return and sustainability, and that it carefully selects and evaluates external managers accordingly. The fund began defining its ESG goals in 2022, later evolving them into an ESG framework and an index portfolio it calls the Portfolio of Tomorrow. PME said BlackRock had provided high-quality services for many years, but that it also considers which managers best align with that vision.
Going forward, PME will rely solely on UBS Global Asset Management and MN, an investment manager based in The Hague, for its equity investments. PME said the consolidation to two managers will also lower its costs. A BlackRock spokesperson said the firm manages more than €350 billion for Dutch clients and was grateful to have served PME for more than a decade.
PME is the latest European allocator to terminate a mandate over ESG misalignment. PFZW, the Dutch pension fund for the care and welfare sector, terminated BlackRock, AQR Capital Management and Legal & General Investment Management in September. In March, AkademikerPension terminated a 3.2 billion Danish krone ($503 million) mandate with State Street, and The People's Pension terminated a 28 billion pound ($37.42 billion) mandate with State Street, awarding the business to Invesco and Amundi. In the U.S., BlackRock has also lost a fixed-income mandate from the Indiana Public Retirement System over its ESG commitment.
Alasdair Docherty, a sustainable finance and data analyst at the Institute for Energy Economics and Financial Analysis, said in a statement that large pension funds increasingly view climate change as a systemic financial threat to long-term portfolio values. In November, New York City Comptroller Brad Lander called for the city's $308.3 billion pension system to drop BlackRock, Fidelity and PanAgora Asset Management over climate expectations.
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