The largest asset manager in the world is warning that politicization presents a new risk for public pensions.
In a letter seen by Bloomberg, BlackRock’s head of state and local government affairs and public policy, S. Jane Moffat, said savers and retirees are facing a “concerning” new trend.
The BlackRock executive says that Democrats and Republicans are asking asset managers to heed their political demands, and politicizing the management of public pension funds.
“The politicization of pension fund management ultimately costs savers and retirees.”
Moffat’s statements follow letters from at least 40 different officials from both parties pressing firms to follow their political views in their asset management strategies, with Democrats being focused on things like climate change, while Republicans asked the funds not to make “speculative predictions” about the environment.
Earlier this year, $65 billion Dutch pension fund PME said US money managers are allegedly risking significant business by “caving into pressures” from President Donald Trump’s administration by abandoning basic principles of responsible investing.
Said Daan Spaargaren, PME’s senior strategist for responsible investing,
“[US money managers] aren’t condemning what Trump is doing and how he is operating and how he is handling issues like climate change and demolishing the judiciary. We are worried about that.”
The PME warned America’s investment industry that a Trump capitulation is prompting it to think twice about its US investments.
Spaargaren said Trump’s actions that are raising concerns include attacking judges, countering America’s move to cleaner energies and the removal of diversity, equity and inclusion (DEI) policies.
“[If asset managers] align their interests and their policies with the current administration in the US, then we are legitimizing also these steps and these practices by offering them our funds.”
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