what do you do when youre facing a market like youve been facing yeah look last year we were up 26 percent this year june 30th down eight and a half a little more and you see the third quarter is going to be brutal again one thing is to remember its a long term investment we are managing the pensions for seven hundred and fifty thousand current and future retirees weve got a new chief investment officer one of the things he brings is a slide that shows the last civil war pensioner daughter of a civil war pensioner died in 2020 so were thinking in long term time horizons and that means your know our private markets investments have done better than our public so were trying to stay diversified as we move to asset allocation thinking about how we have something that doesnt respond to the third quarter share but is pays attention to the long term sure i would argue thats sort of uk pension funds probably thought the same thing and look what happened to that look i mean the city has set up a system thats wellfunded less because we can beat the market and more because we make the investments that are necessary to keep those strong so you know when we have losses like this year that means for the next five years from the city budget were gonna be putting more money in to cover the obligations we have thats why our funds are 80 percent funded and weve kept them that way through up markets and down brands good morning its guy im in london weve had quite the week over here the central bank has had to step in due to that issue within the family right exactly what lessons have you learned from that what have you been doing maybe take a look at what you guys are doing in relation to what weve learned here yeah well first as i said were lucky in new york city to have a set of systems that have been developed over the long term to protect us over the long term so last year when we were up 26 percent that meant we could put a little less in over five years this year the city is going to have to budget even as were planning for how do we pay for our teachers how do we pay for our firefighters how do we make sure we make the investments that keep us strong over time obviously were watching what the fed does and trying to keep an eye on it and this is a real challenge because inflation continues to be an enormous issue but the risks of recession are very high and we have to get the city ready for it there are city new york city did make historic deposits into our rainy day fund our long term revenue stabilization fund so you try to pay attention to the things that will get you through that next recession and make sure that youre not overreacting to short term issues but keeping that broad long term the risk that weve seen over here has been one of extreme swings weve seen an issue of a lack of liquidity in key portions of the market and im wondering whether youre looking at what is happening with kutty the fed is basically withdrawing significant amounts of liquidity out of the system and looking at where that lack of liquidity could show up in your and your pension portfolios other areas that you are identifying right now could face risk if we do start to see problems with liquidity weve seen this in past financial crises and weve seen how quickly they can erupt are you auditing your portfolio as im sure you do this on a regular basis but now feels more kind of germane to see what liquidity or lack of it could do and generate some outside financial stability risks it is something were looking at we have a brand new chief investment officer steve meyer has only been on the job nine weeks and theyve been a challenging nine weeks but looking at our cash desk has been one of the things that he prioritized so to pay real attention there and then weve been looking broadly also at just our asset allocations were gonna do a new asset allocation probably early next year we pursued some legislation at the state level to give us a little more flexibility across private as well as public markets than we had before so then i also feel like as you mentioned if we need if theres a funding gap you have to funnel it from elsewhere i get that thats going to pose risks and itself right because any all of a sudden you get a lot of money from say capital gains tax which could not see the same kind of boosting you normally do because of the market and the citys revenues are down because it risk exactly in fact you could see some tax loss harvesting meaning else how do you think about that what do you look at well this gets to how the city pays attention to just what we can do to keep the new york city metropolitan economy strong obviously theres a set of global trends here that are not looking promising but if you think back to where new york city was two years ago when we were worried would anyone ever want to live work ride the subways in new york city again are we facing existential risk to the citys economy i dont think it looks like that today even though folks are at about 60 percent office occupancy were back to ninety seven percent pre pandemic job levels and above pre pandemic job levels in tech and healthcare you know google they opened up so that people could live in whatever city that google has office presence in and two thousand google employees moved to new york city so keeping new york city strong is the place people want to be and invest and create thats obviously whats important for the city and staying strong the next the next few years you said brand that youre going to be having a review of your asset allocation the beginning of next year big funds generally have to disclose what they hold and why theyre holding is 13 f disclosures a part of that process do you think that you should be more transparent about the way that the pensions are run are you under pressure to do that im a big believer in transparency just since i got into office in january weve actually put out these monthly economic newsletters that disclose a whole set of new data weve put up new dashboards on climate and on correction and i am working on more transparency and the citys investment portfolio and well have more to say on that in the very near future youve been going on for blackrock in terms of their esg etc they run about 43 billion dollars for you guys if youre not happy with it are you going to like sell out of that and move that money somewhere else this is a thing that we all have to answer together blackrock recognizes that climate risk is financial risk and thats why they like almost everyone else like state street like vanguard like the banks and insurance companies made commitments to achieve net zero in their portfolios in a paris aligned pathway if we do that we can prevent the loss of trillions of dollars in the coming decades but we have to be serious about it so we are really worried that people made these net zero commitments but that their actions arent living up to it as red state treasurers and attorneys general have pushed back protecting their fossil fuel donors people have walked back the action thats necessary so we all have to do it blackrock has to do it states reid has to do it vanguards i mean you do it the many new york city has to do it that means we have a collective obligation to hit those targets to save lives but also to protect our portfolio so were all in it together we put this letter out to blackrock saying youre our biggest asset manager youre the worlds biggest asset manager that means benchmarking 100 percent of your portfolio it means paying attention to all the emissions it means making a real plan to phase out of fossil fuels and were going to keep up the push to make sure that happens