San Francisco shifts passive equity mandate to active BlackRock ESG strategy Pensions & InvestmentsSan Francisco shifts passive equity mandate to active BlackRock ESG strategy Pensions & InvestmentsSan Francisco shifts passive equity mandate to active BlackRock ESG strategy Pensions & Investments
Impact Investing Forum 2023
London. Dec 05-06, 2023.
The San Francisco City and County Employees’ Retirement system is changing from a passive domestic large-cap equity portfolio managed by BlackRock to a systematic active equity strategy that incorporates governance, environmental, and social considerations.
Stephen Worsfold, a spokesperson for the pension fund, said that the board of directors approved the change in strategy at Wednesday’s meeting.
The strategy is part BlackRock’s Systematic Active Equity offering. It incorporates ESG considerations in order to outperform Russell 1000 Value benchmark. Its expected annual tracking error increases to 200 basis points from the 10 basis point of BlackRock’s Russell 1000 Value separate account in which SFERS currently invests.
A Thursday news release from the pension fund stated that the active ESG-focused portfolio will be at least 30% more carbon-intensive than the Russell 1000 value benchmark. This is in line with the pension fund’s goal to become net zero carbon in 2050.
A presentation was included with Wednesday’s board materials. It stated that staff recommended the change to increase Alpha and to include more ESG considerations in its public equity portfolio.
The news release stated that Systematic Active Equity includes “ESG insights on topics like carbon, water efficiency and carbon intensity, as well as human capital, and aligns to the goals of SFERS ESG framework.”
As of Sept. 30, SFERS’ actual allocation for public equities was 36%