Sens. Elizabeth WarrenElizabeth WarrenDemocrats press cryptomining companies on energy consumption Ocasio-Cortez: Supporting Sinema challenge by someone like Gallego would be easy decision Over 80 lawmakers urge Biden to release memo outlining his authority on student debt cancellation MORE (D-Mass.) and Cory Booker (D-N.J.) huddled Tuesday with a trio of President Obama’s Cabinet secretaries at the White House as part of a congressional push for pension and investment managers to seek more business with minority and female-owned firms.
The two senators — among the fastest rising stars in the Democratic Party — were joined by Reps. Maxine Waters (D-Calif.) and Gregory Meeks (D-N.Y.) at the meeting, which featured nearly 75 federal, state, local, and private sector pension and investment managers.
Treasury Secretary Jack LewJacob (Jack) Joseph LewThe Hill's Morning Report - Biden argues for legislative patience, urgent action amid crisis On The Money: Senate confirms Yellen as first female Treasury secretary | Biden says he's open to tighter income limits for stimulus checks | Administration will look to expedite getting Tubman on bill Sorry Mr. Jackson, Tubman on the is real MORE, Commerce Secretary Penny Pritzker, Labor Secretary Thomas Perez and National Economic Council Director Jeffrey Zients represented the White House.
The gathering was in response to a push by Democratic lawmakers to encourage government pension plans to more frequently turn to so-called emerging money manager firms. The term is loosely defined as undiscovered and smaller money managers, but also encompasses minority- and woman-owned firms.
In a letter to the White House in July, which was spearheaded by Booker, a group of six senators argued that the federal government could increase its returns by diversifying its investment portfolios.
The lawmakers argue in the letter there is a “severe under-representation of diverse and emerging managers” receiving funds from the Pension Benefit Guaranty Corp., an independent government agency that insures and protects private-sector worker pensions.
The lawmakers said states including New York, Texas and Virginia have seen economic gains from giving those emerging firms a foothold, and that those companies “have proven over time to outperform some of the largest equity managers.”
“A lack of representation of diverse and emerging investors in PBGC allocations is compounded by persistent issues around the lack of diversity in the financial services industry and scarcity of capital in communities of color,” the lawmakers add, saying that diversification represents a “clear opportunity” to affect change.
The request appears to have gained traction within the Obama administration.
According to a senior administration official, the Cabinet secretaries encouraged the gathered pension managers from federal agencies “to review their practices and identify potential opportunities for increasing utilization of diverse managers where it would improve the financial performance of the plan.”
The administration will also convene an internal working group to share best practices for pension managers looking to diversify the firms running their funds.
It does not appear, however, that the Obama administration is moving ahead yet with special allocations to require the federal government to employ minority- and woman-owned asset management firms, as exist in some states. New York, Maryland, Pennsylvania, Illinois and other states have adopted policies giving preference to those firms or investors incorporated within their states.
— This story was posted at 1:39 p.m. and updated at 1:55 p.m. and 8:00 p.m.