A group representing UK pension fund trustees has welcomed the recent announcement by asset manager BlackRock to allow institutional clients in pooled funds to vote directly in annual meetings as “a major milestone in stewardship for institutional investors”.
The inability of asset managers to allow investors within a pooled fund to vote directly at annual meetings and other corporate actions via proxy voting has long been a frustration for pension funds and other institutional investors.
Inadequate technology and the sheer number of intermediaries involved in the proxy voting process have typically been cited as the reasons for the lack of action. However, a number of new services have launched in the last 12 months aiming to remedy the process, some of which were highlighted in a recent article in the latest FundsTech report.
The decision by BlackRock, the world’s largest asset manager, to allow its largest pension fund and institutional clients to vote at annual meetings will take effect from 2022 and will apply to nearly half of the $4.8 trillion of index equity assets it currently holds.
According to the UK’s Association of Member Nominated Trustees, the move is a “game changer”.
Its co-chair Janice Turner said: “AMNT has been campaigning for nearly a decade for pension schemes investing in pooled funds to be able to have a voting policy that is respected by their fund managers.
"Now that BlackRock, and DWS which launched a fund with AMX earlier this year, have shown that this is possible we call on the rest of the fund management industry to follow their lead," added Turner.
BlackRock’s move comes in the wake of a report issued by the UK’s Task Force on Pension Scheme Voting Implementation that called for pension funds within pooled funds to have their voices heard on voting issues and not delegated to their asset managers.
Taskforce member and head of pension investments at Scottish Widows, Maria Nazarova-Doyle, said it is “incredibly important for asset owners like us to have a voice when it comes to voting in pooled funds.”
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