Levine wants three of the city's public pensions to commit $5 billion to private markets focused on climate solutions. In a Wednesday statement, the Bureau of Asset Management identified the funds in scope: the New York City Teachers' Retirement System, the Employees' Retirement System and the Board of Education Retirement System.
He pitched the pivot as a way to meet climate objectives without giving up performance. "There's a pretty compelling case that the most important projects are now being funded in the private markets," he said in an interview. There's "also a strong case that this is a good investment on financial merits. And because of all that, this is the right move right now."
TRS, NYCERS and BERS are described as net zero funds with a target of putting $37.8 billion to work by 2035, and proactively steering money into private markets is one step toward that target, according to the Wednesday statement.
Levine is responsible for five New York City pension funds that together manage nearly $330 billion. Brad Lander, his forerunner in the role, likewise spoke out on environmental, social and governance priorities. The pensions are re-tendering their passive equity mandates, now run by BlackRock Inc., and Lander had argued the firm did not meet expectations on decarbonizing portfolios or on stewardship. BlackRock characterized Lander's move as a "politicization of public pension funds."
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This would also mark a shift from where most climate-linked gains have shown up so far for the pensions, which has largely been through passively managed portfolios concentrated in technology stocks. Earlier this year, Levine criticized SpaceX's governance model, while noting that avoiding exposure to the company is difficult through passive holdings.
This comes during Climate Week in New York, an event expected to bring in more than 100,000 attendees in the coming days to weigh investment, policy and civil-society actions, and to spotlight the affordability and security upsides of clean energy. As Levine put it, "Americans are facing high energy costs, while extreme weather is putting growing strain on infrastructure that wasn't built for the climate challenges we face today."
Levine said the investable set spans solar generation, battery transmission, electric vehicles and modernizing buildings, plus projects that build resilience to rising temperatures, including improving access to water. "These are projects which are built on proven technology and they just need financing," he said. "And we wouldn't be doing it if we didn't think it was a good investment for our pension funds, but this is increasingly the future of energy and infrastructure in the world, and we want to make sure that we also get the financial upside that we expect is coming."
Levine's case boils down to putting long-term capital to work in a part of the economy he expects to grow while still focusing on returns. "Our pension systems have an opportunity to put substantial capital to work in a growing sector," he said. The goal is "seeking the strong returns our pensioners depend on while investing in cleaner, more reliable and resilient energy that can lower costs and reduce emissions at the same time."
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