NYC Comptroller reviews BlackRock and State Street mandates in $87bn portfolio shakeup

The New York City Comptroller, which oversees more than $306bn in investment assets for the five New York City public pension systems has issued a tender notice for two key passive equity mandates within its portfolio, following months of discussion over a potential divestment.

The move marks the most significant overhaul of its manager line-up in nearly a decade, with the comptroller having last reviewed its passive mandates in 2017. Blackrock currently manages $61.06bn and State Street $26bn for the five systems.

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The public pension fund has today issued a notice of search for asset managers to provide passive indexing investment services according to a note seen by Net Zero Investor.

This suggests that BlackRock and State Street could in theory reapply for the mandate, but it also opens the door for other managers to apply. The investment office outlined that it is seeking managers with the capability to manage either Capitalization-weighted equity index strategies, Smart beta strategies, Alternative-weighted index strategies, ESG index portfolios and or low-carbon index portfolios.

Managers must offer to run separate accounts, fully invested portfolios and no ETF-based solutions, the mandate would run for an initial 3 years with prospects to renew it for up to nine years, the tender document revealed. Interested parties can now apply until 15 July. 

The mandate overhaul comes after former New York City Comptroller Brad Lander last year recommended to drop BlackRock among other managers, citing concerns that the manager’s approach to stewardship did not align with the pension fund’s net zero ambition. However, Lander had previously listed State Street as a more responsive manager.

The pension fund has also been the target of climate campaigners, who have urged it to divest from BlackRock, the world’s largest asset manager, criticising the firm’s more cautious stance on climate stewardship in recent years.

However, the Office of the New York City Comptroller, which is now led by Mark Levine, has been careful to avoid explicit references to climate change in its mandate overhaul.

The scope of the potential divestment is more far reaching. While former comptroller Brad Lander had urged trustees to terminate a $42bn BlackRock mandate applying to two funds within the systems, contracts for all five pension funds within the systems are now at stake. 

Commenting on the change, Levine said: “Fulfilling our mandate of delivering strong returns for our public sector workforce and retirees requires ongoing review of our contractual relationships with each of our asset managers. We cannot keep these relationships on autopilot. I look forward to working with my fellow trustees to ensure we select the managers that meet our highest standards of performance” 

Responding to the announcement, a spokesperson for BlackRock told Net Zero Investor:  “We are proud that New York City is a long-standing client, and we look forward to continuing our work with them so that New York’s police officers, firefighters, teachers and other public employees can have a secure retirement.” State Street declined to comment on the news.

The move was welcomed by some climate campaigners already. Richard Brooks, climate finance director at Stand Earth said: "It's been a long time coming for the mandates of Black Rock and State Street to be reviewed by New York City's big pension funds. Both have not responded to repeated demands to improve their governance and how they manage climate risk, to the detriment of the funds. Given the values and investing approach of the NYC pensions, its time to find better aligned fund managers that are responsive to one of the biggest pension systems in the world and don't take these contracts for granted. "

Olivia Leirer, executive director at New York Communities for Change highlighted that the new appointment would be closely watched: "We welcome Comptroller Levine’s review of the funds. However, only action matters. New York City should prudently move its considerable business from big, dirty money managers like BlackRock and State Street to cleaner firms. Contracts and money should shift to better align with the city’s future needs, which includes avoiding the devastation of runaway climate change and improving its returns over time. These are mutually reinforcing goals: proper fiduciary action reduces climate risk.”

The New York City Comptroller is the latest major asset owner to review its manager line up, after major European investors last year announced that they had parted ways with managers over climate concerns. Among others, the People's Pension has divested $28bn from State Street, citing stewardship misalignment. Dutch pension funds PME and PGGM have also recently overhauled their manager line-up. 

US pension funds which had explicitly embraced a climate agenda have in the past caught the ire of the US administration and republican leaning members, with several funds and managers, including BlackRock having been taken to court by republican-led states over their stance to phasing out coal.

The Office of the New York City Comptroller has been sued by a member in 2021 over its decision to divest from fossil fuels. However, the case was dismissed in 2025 by the New York Court of Appeals.

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