In response to BlackRock Inc.'s fossil fuel policy, Texas is pulling out of the investment firm for $8.5 billion, the head of the State Board of Education said in a statement. The $53 billion Texas Permanent School Fund formally notified BlackRock on Tuesday that it was "terminating its financial management of approximately $8.5 billion in Texas' assets," according to board chairman Aaron Kinsey, a Republican.
The biggest asset manager in the world sharply criticized the action.
A BlackRock representative sent an email to Bloomberg stating, "Today's unilateral and arbitrary decision by Board of Education Chair Aaron Kinsey jeopardizes Texas schools and the families who have benefited from BlackRock's consistent long-term outperformance for the Texas Permanent School Fund." "The decision disobeys professional advice and disregards our $120 billion investment in Texas public energy companies." Politics and performance—especially for taxpayers—should never take precedence in a fiduciary relationship.
According to Kinsey, the fund's management chose to sell BlackRock in order to abide with a rule that will take effect in 2021 and limit investments made with businesses that participate in so-called boycotts of the fossil fuel sector. State Comptroller Glenn Hegar is considering a boycott of the business, and BlackRock is on his list of corporations. According to its website, the Texas State Board of Education oversees the Permanent School Fund's investments.
BlackRock has always said that it does not participate in boycotts. The business claimed on Tuesday that "BlackRock is helping millions of Texans invest and save for retirement." "We have invested more than $300 billion on behalf of our clients in Texas-based businesses, infrastructure, and municipalities. Of that total, $125 billion has been allocated to the energy sector, which includes $550 million in a joint venture with Occidental."
BlackRock CEO Larry Fink and Republican Texas Lt. Gov. Dan Patrick shared the stage at a Houston business gathering in February. This raised rumors that the state and BlackRock may no longer be at odds. This most recent declaration, however, indicates that the state's conflict with BlackRock is not going away any time soon. When contacted for comment, a Permanent School Fund representative did not reply. Established in 1845, the fund assists in funding Texas schools.
In a 2023 board meeting, Holland Timmins, the previous CEO of the school fund, said that a BlackRock-managed international equities fund had a competitive fee and had outstanding performance. At the time, he pointed out that the school fund had previously left a BlackRock cash fund because there were excellent alternatives available.
A profile on the state BOE website states that Kinsey is the CEO of American Patrols, an aviation oilfield services firm located in Midland.
According to Kinsey's statement, "Today represents a major step forward for the Texas PSF and our state as a whole." "The PSF will not be silent as Wall Street attacks our financial future. This courageous move contributes to ensuring that our PSF is, in fact, perpetual and will support generations of Texas kids' bright prospects and opportunities.
The biggest asset manager in the world sharply criticized the action.
A BlackRock representative sent an email to Bloomberg stating, "Today's unilateral and arbitrary decision by Board of Education Chair Aaron Kinsey jeopardizes Texas schools and the families who have benefited from BlackRock's consistent long-term outperformance for the Texas Permanent School Fund." "The decision disobeys professional advice and disregards our $120 billion investment in Texas public energy companies." Politics and performance—especially for taxpayers—should never take precedence in a fiduciary relationship.
According to Kinsey, the fund's management chose to sell BlackRock in order to abide with a rule that will take effect in 2021 and limit investments made with businesses that participate in so-called boycotts of the fossil fuel sector. State Comptroller Glenn Hegar is considering a boycott of the business, and BlackRock is on his list of corporations. According to its website, the Texas State Board of Education oversees the Permanent School Fund's investments.
BlackRock has always said that it does not participate in boycotts. The business claimed on Tuesday that "BlackRock is helping millions of Texans invest and save for retirement." "We have invested more than $300 billion on behalf of our clients in Texas-based businesses, infrastructure, and municipalities. Of that total, $125 billion has been allocated to the energy sector, which includes $550 million in a joint venture with Occidental."
BlackRock CEO Larry Fink and Republican Texas Lt. Gov. Dan Patrick shared the stage at a Houston business gathering in February. This raised rumors that the state and BlackRock may no longer be at odds. This most recent declaration, however, indicates that the state's conflict with BlackRock is not going away any time soon. When contacted for comment, a Permanent School Fund representative did not reply. Established in 1845, the fund assists in funding Texas schools.
In a 2023 board meeting, Holland Timmins, the previous CEO of the school fund, said that a BlackRock-managed international equities fund had a competitive fee and had outstanding performance. At the time, he pointed out that the school fund had previously left a BlackRock cash fund because there were excellent alternatives available.
A profile on the state BOE website states that Kinsey is the CEO of American Patrols, an aviation oilfield services firm located in Midland.
According to Kinsey's statement, "Today represents a major step forward for the Texas PSF and our state as a whole." "The PSF will not be silent as Wall Street attacks our financial future. This courageous move contributes to ensuring that our PSF is, in fact, perpetual and will support generations of Texas kids' bright prospects and opportunities.
