Catalog of Economically Targeted Investments by Pension Funds

August 23, 2017

In October of 2015, the Department of Labor released new guidance on the Employee Retirement Income Security Act (ERISA). This reaffirmed that pension funds — holders of $20+ trillion in capital — could pursue economically-targeted investments (ETIs). These kinds of investments let pension funds put their capital to work in ways that not only generate financial returns but also create jobs and support local economies and the environment — furthering the long-term interests of their plan participants and beneficiaries.

Following the one-year anniversary of the ERISA ETI guidance, the Accelerating Impact Investing Initiative (AI3) is pleased to share a first-of-its kind online catalog of 118 pension fund ETIs and an accompanying research brief that extensively documents ETIs and offers insight into trends, analysis, and reflections.

 

Key Findings

  • The majority of ETIs (70%) were made by public pension funds

  • The average number of ETIs per year was highest between 1994 and 2008, with a significant decrease between 2009 and 2015. This decrease coincides with the Great Recession and the Department of Labor’s previous 2008 ERISA guidance that many believe had a chilling effect on ETIs.

  • ETIs are most often private equity or fixed-income investments – these two asset classes represent a majority of ETIs (52%)

  • ETIs tend to be less than $500 million in size – with 37 percent reporting between $100 and $500 million in assets under management (AUM) and 29 percent reporting less than $100 million in AUM

Release of ETI Catalog and Research Brief

Download (PDF, 833KB)

 

The goal of this research, and in developing the ETI catalog, is to compile and share information on both public and private pension funds pursuing investments that target social, environmental, or economic benefits. This catalog will better enable information-sharing among the pension fund community and other interested parties by serving as a dedicated online resource for information on ETIs.

 

When pursued prudently, ETIs have the potential to unleash a tremendous amount of new private investment that delivers significant benefits to communities across the U.S.

 

In early 2017 we will be releasing further research on ETIs to accompany this catalog.  This research will provide additional information and clarity on the state of pension fund ETIs and will explore the history of ETIs; including how these investments are structured, overarching trends affecting pension funds’ consideration of ETIs, and how ETIs have evolved over time.  The research will include case studies as concrete examples of pension fund ETIs, and profiles of intermediaries working with pension funds to invest assets prudently and in accordance with their fiduciary duty.

 

In the coming months we encourage pension funds, researchers, and others to engage with us on this research and to share with us updated information and data on new and existing ETIs. We look forward to your comments and questions on the ETI catalog and research brief. Contact us at twoelfel@pcvmail.org and ldixon@pcvmail.org.

 

The ETI Catalog

A simplified version of the ETI catalog is embedded below. You can also click the green button to download the full and expanded catalog as a Microsoft Excel file.

 

DOWNLOAD AS AN EXCEL FILE

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