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One of the purposes of the New America Alliance is to focus a spotlight –on our incredible investment firms and managers, on our community, and on the possibilities that are in our future. This is a practice that was started long before I came to this organization. In fact, you may say that it is a NAA 21-year-old tradition going back to the organization’s founding in 1999.
We recently focused our spotlight on transparency. Transparency allows us to see what is, to take responsibility, identify how best to improve, and frankly, to acknowledge what has been accomplished and where there is work to be done. Transparency is also accountability. That is why it is so important that our institutions, including our largest public pension plans, be transparent, accountable, and worthy of the public’s trust and confidence.
On October 4, 2021, California Governor Gavin Newsom signed AB 890, legislation authored by Assemblywoman Sabrina Cervantes (D-Riverside) that will require the California State Teachers Retirement System (CalSTRS) and the Public Employees Retirement System (CalPERS) to report annually to the California Legislature on their use of emerging and diverse managers across all assets classes in which the funds invest. The two California pension funds with more than $790 billion in assets are the biggest public funds in the nation, affecting approximately 2,975,000 Californians.
The New America Alliance is proud to have sponsored this important legislation with Assemblywomen Cervantes. This endeavor was in partnership with the Association of Asian American Investment Managers (AAAIM) and the support of other sister organizations. The law formalizes and advances the process of providing the California Legislature with the data they need to ensure the two funds are properly diversifying their portfolio of managers. This will assist in ensuring top quartile returns for pensioners, while also enabling the funds to access new markets and opportunities to generate alpha.
Both CalSTRS and CalPERS are firm believers in transparency. Recently in a Top1000Funds article, Anne Simpson, CalPERS Managing Investment Director, said that “the whole issue of transparency is relevant to accountability which is important to performance.” We wholeheartedly agree. NAA is ready to assist and become a resource to CalSTRS and CalPERS on this important endeavor.
But state level engagement is but one of the forums in which we must actively engage. At the national level, we support and applaud Senator Bob Menendez (D – New Jersey), who introduced The Improving Corporate Governance Through Diversity Act of 2021. This transparency measure will shed light on the abysmal lack of diversity and inclusion in corporate America. Like NAA, Senator Menendez believes that diversity makes us stronger, and that the prosperity of American Latinos is tied to America’s economic strength. We are also collaborating closely with Senator Tim Kaine (D-Virginia) to introduce legislation that will increase transparency regarding the asset management firm selection processes by federal entities.
And to that we say Bravo! America is a great country not because of the size of our military (proud USAF vet here!), or our wealth, but because of the diversity of cultures and peoples that make us the envy of the world. Let us not forget that nowhere else can you find opportunities to generate alpha in such diverse markets as you can in the United States.
For 21 years our goal has been to increase the availability of investment capital to women and minority-owned firms, and to promote diverse leadership in entrepreneurship, corporate America, and public service. Transparency ensures that these diverse groups are getting their time in the spotlight.
And when the light is shone and responsibility is acknowledged, we grow.