Written by Ira Binney
NEW YORK (Reuters) – A senior BlackRock executive said on Thursday the world's largest asset manager was “disappointed” by a Texas fund's move to raise assets by $8.5 billion, adding that the fund urged administrators to reconsider.
Texas State Board of Education Chairman Aaron Kinsey said on Tuesday that the Texas Permanent School Fund (PSF) will sell approximately 15 of its assets to comply with a 2021 state law restricting the agency's dealings with indicted financial companies. announced that it would terminate its contract with BlackRock, which covers the Boycott energy companies.
It was the latest entourage in a battle between Republican state and federal officials and Wall Street companies over the use of environmental, social and governance (ESG) factors in investments.
BlackRock Vice Chairman Mark McComb sent a letter to Kinsey on Thursday, saying the company has generated $250 million for PSF since 2006 and has repeatedly denied allegations of discrimination against oil and gas companies. He said he had done so.
“We urge you to reconsider your decision and prioritize the Texas schools and families that have outperformed BlackRock's consistent long-term investments,” McComb said in the letter.
Kinsey said he took the action to fulfill his obligation to manage funds for energy-producing countries.
BlackRock said state law does not require the sale because the fund's outperformance indicates that “a sale is not in the best interests of Texas PSF.”
A March 19 letter sent by PSF to BlackRock, seen by Reuters, asked for termination of the agreement governing its investments in international stocks and certain funds, without giving reasons.
BlackRock had $10 trillion in assets under management at the end of 2023. McComb said there is $320 billion in energy investments around the world and $120 billion in Texas-based public energy companies.
Just last month, CEO Larry Fink attended an event in Houston with Lieutenant Governor Dan Patrick aimed at promoting investment in Texas' power infrastructure.
(Reporting by Ira Binney; Editing by Franklin Paul and Daniel Wallis)