New York Assembly Bill A05471

New York 2025-2026 Regular Session

• Introduced: 2/14/25
• Refer: 2/14/25

Caption

Enacts the "New York state agency BIPOC asset management and financial institution strategy act" to ensure the promotion of equity, diversity, and inclusion within the state pension system and the New York city pension system's investments by mandating a minimum allocation of assets to BIPOC asset managers, BIPOC financial institutions, and BIPOC financial or professional service firms; addresses disparities in investment opportunities and fosters economic growth within BIPOC communities, aligning with best practices in investment management and bolstering the financial well-being of New York City and state and residents thereof (Part A); directs the comptroller and the commissioner of taxation and finance to undertake a study on the feasibility of establishing a venture capital program within the common retirement fund and a venture capital tax credit to ensure equitable access to investment opportunities, and foster the growth of emerging diverse founding member businesses (Part B); relates to fair investment practices by investment advisers within the state of New York (Part C).

Impact

The bill is expected to have profound implications on state laws governing public pension fund investments, specifically altering the existing investment advisory practices to elevate inclusivity for BIPOC entities. By enforcing a specific percentage of state pension funds to be invested in BIPOC-managed firms, it aims to diversify the investment landscape and promote fair economic participation across racial lines. The legislation could also reshape relationships between state pension funds and BIPOC asset managers, creating a more equitable investment environment which may spur sustainable economic development in historically marginalized communities.

Summary

Bill A05471, known as the "New York State Agency BIPOC Asset Management and Financial Institution Strategy Act," aims to enhance equity, diversity, and inclusion within the investment practices of the New York State pension systems. One of its primary goals is to mandate a minimum allocation of assets specifically to BIPOC (Black, Indigenous, and People of Color) asset managers and financial institutions. This requirement intends to address the historical disparities faced by BIPOC communities in accessing investment opportunities and to foster economic growth within these demographics. Furthermore, the bill includes provisions to conduct a study on the feasibility of establishing a venture capital program within the state's common retirement fund to promote equitable access to investment opportunities.

Contention

While supporters of Bill A05471 argue it is a necessary step toward dismantling systemic barriers in finance and investment management, detractors warn of potential challenges in implementation. There may be concerns regarding creating equitable standards that ensure quality and performance expectations for the BIPOC asset managers selected, alongside the risk of tokenism where only a superficial level of engagement is achieved. Ensuring genuine, impactful participation from BIPOC investment managers while meeting investment objectives can provide a complex balancing act for state regulators and pension fund managers.