BlackRock, the world’s largest asset manager, is pushing back against Texas’ decision to withdraw approximately $8.5 billion in assets from the Texas Permanent School Fund (PSF) due to what the state perceives as a boycott of energy companies.
The Chairman of the Texas State Board of Education, Aaron Kinsey, announced on Tuesday that the PSF would pull its funds to comply with a 2021 state law aimed at preventing public funds from being managed by financial institutions that boycott the oil and gas sector. Kinsey stated that BlackRock’s approach toward energy companies contradicts the fiduciary duty owed to Texans.
In response, BlackRock’s Vice Chairman, Mark McCombe, penned a letter expressing dismay at Kinsey’s announcement. McCombe emphasized that the decision prioritizes short-term politics over long-term fiduciary responsibilities. He urged a reconsideration of the decision, highlighting BlackRock’s consistent, long-term investment performance benefiting Texas schools and families.
He criticized the lack of transparency in the decision-making process, highlighting that BlackRock learned of the termination through a press release, with some Texas PSF board members reportedly unaware beforehand.
The letter underscored the need for transparency and consensus in decisions of such magnitude, emphasizing the welfare of Texans as a shared priority. BlackRock appealed for a reevaluation to preserve the mutually beneficial relationship between Texas PSF, BlackRock, and the communities they serve.
