New York City’s Bureau of Asset Management is in talks with fund managers and other possible partners to expand place-based investments by the city’s five pension funds, according to Valerie Red-Horse Mohl, deputy chief investment officer for responsible investing at BAM.

“I’ve had meetings with four other entities based in the New York area that have a strong interest in this type of investment,” Red-Horse said last month at a committee meeting of the New York City Employees’ Retirement System (NYCERS).

“They said that if we curate something and move forward with it, then they would be interested in coming into that.”

New York City’s pension funds started making economically targeted investments (ETIs) in the 1980s. Since then, they have allocated $3.6 billion out of a target amount of $5.7 billion, or 2 percent of assets under management, with the money going to affordable housing and real estate, according to Red-Horse.

Red-Horse joined BAM in February, charged with leading the ETI programme as well as the the diverse and emerging manager and brokerage programmes, and the broader ESG programme.

Now BAM is looking to carry out an annual pacing plan for ETIs, working with NYCERS’ general consultants to put forth possible place-based investments, Red-Horse said at the meeting.

In the meantime, the bureau is holding talks with fund managers to discuss a few ETI proposals for this year, including a telehealth project for low-income communities with “nice returns”, Red-Horse said.

“I do believe we should have at least one [ETI] in front of you by the end of the year,” she added.

For 2026, BAM could consider investments in a housing initiative for city employees to buy homes in the area, and invest in private equity growth capital for diverse founders in the city, among others, she said.

Looking further ahead, Red-Horse said she has been tasked by Comptroller Brad Lander to look into a potential investment to originate student loans for undergraduates from the city.

Quadruple bottom line

ETIs do not usually offer the returns that pension funds want because they often come with guarantees, but they do offer a “quadruple bottom line” that involves risk-adjusted returns, outreach to diverse fund managers, measurable collateral benefits and investments in the local economy, Red-Horse said.

To lessen the risks from place-based investments, BAM is in talks with non-profit organisations to secure guarantees or first-loss protections on ETIs, she added.

“You’re never going to get super high returns on small business lending. You don’t want to. You don’t want to be charging small businesses in New York a huge coupon. But if it was guaranteed, then that return would be fine for your portfolio,” she said.

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