Elizabeth Warren, Bernie Sanders and a half dozen other senators last month penned a letter to the National Railroad Retirement Investment Trust, encouraging the prioritization of diversity when selecting asset managers.
[The letter can be read here. It’s also embedded below.]
The NRRIT is the entity that manages the $25 billion portfolio of federal railroad employees.
The Senators are seeking clarity on how the NRRIT selects external money managers, with the stated goal of encouraging the entity to develop a program to allocate more funds to women or minority-owned funds. From the letter:
“Our economy and nation thrives when we develop inclusive political and economic institutions. Therefore, it is in our national best interest to share in a common goal of ensuring government better represent the diversity of our nation,” the Senators stated.
“We believe there is a great opportunity for your plan to set a clear example for institutional investors and the PBGC’s initiative could be a model for increasing investment with diverse managers across all asset classes… Accordingly, we request that you submit a plan that outlines how the NRRIT could similarly create a program for smaller and diverse asset managers,” the Senators concluded.
A similar letter was written by Sen. Booker to the PBGC in 2014. It seemed to work; the PBGC now has a program in place (the Smaller Asset Managers Pilot Program) allowing smaller firms to compete for allocations. From a press release:
In July 2014, Senator Booker led his colleagues in raising “the severe underrepresentation of diverse and emerging managers” at the Pension Benefit Guaranty Corporation (PBGC), after learning that the PBGC had allocated $0 of its over $85 billion in assets to diverse managers. In May of 2015, the PBGC launched a pilot program for smaller asset managers and earlier this year, the agency allocated $875 million to five investment managers selected for the pilot.
Here’s the letter: