Groups advocating for communities affected by private equity investments have called on the North Carolina state retirement fund to stop investing in certain private equity groups. But state investment managers say retirement funds have limited leverage.
The North Carolina Retirement System is retirement and pension savings for approximately 900,000 current and retired North Carolina government employees. It is approximately $110 billion in size and distributes $590 million monthly to over 350,000 members and beneficiaries. The system is managed by his Dale Folwell, Treasurer of North Carolina.
It manages a variety of investments, including private equity groups, as well as other major pension investment systems. A new report by Private Equity Stakeholder Project finds one such group, Landmark Partners, accused of abusing renters to maximize profits, including those in North Carolina real estate. It explains how you invested in the company. The Private Equity Stakeholder Project is now asking Folwell to cease further investments with Landmark Partners and to leverage its large investment in Landmark Partners to influence property owner reform.
North Carolina Retirement System must cease new commitments to Landmark Partners. It should also use its influence as Landmark’s largest pension fund investor to ensure that Progress takes concrete steps to make housing safe, affordable and accessible. .
Private Equity Stakeholder Project
In the decade following the 2008 housing crisis, businesses purchased a large proportion of single-family homes and converted them to rentals. Tenant rights advocates are beginning to shine a light on these corporate landlords, alleging abusive tactics to maximize profits, a U.S. House special subcommittee said in his July published a report detailing some of these abuses. That report focused on four of his companies, including one called Pretium Partners, which owns two of his companies, Progress Residential and Front Yard Residential. Those businesses filed for evictions at higher rates than realized during the coronavirus pandemic, according to reports.
Rep. James Cliburn, chairman of the committee, said the companies were “aggressively pushed out to increase profits.”
Trends analyzed by News & Observer series earlier this year.
Progress Residential owns more than 7,700 homes in North Carolina and Landmark Partners has invested in Progress Residential. North Carolina’s pension fund has invested heavily in Landmark Partners, so the Private Equity Stakeholder Project used its state influence to push the Treasury Secretary to crack down on Progress Residential’s abuse of landlords.
“North Carolina Retirement System must cease any new commitments to Landmark Partners. We will also use our influence as Landmark’s largest pension fund investor to help Progress make housing safe, affordable, and affordable.” We need to make sure that we take concrete steps to make it more accessible at a price.” Group.
Folwell argues that while Landmark Properties’ investment may be substantial, the state’s investment in Pretium is small, less than $23 million. By comparison, pension funds have invested approximately $2.6 billion in Landmark Partners, many in other funds.
“There are many facets to our relationship with Landmark. Landmark includes all types of investments, including software companies, manufacturing companies, and propane gas companies.”
Nonetheless, he says he supports efforts to reduce landlord abuse.
Private Equity Stakeholder Project
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“It doesn’t matter if this is millions or thousands of apartments if there are people spending money on shelters that have toilets that don’t flush, water that isn’t clean, insect problems. It doesn’t matter if it happens to one person. If there are, there are too many,” he said.
Landmark’s state investment in Pretium may represent only a small fraction of the state’s total investment in private equity groups, but proponents believe that treasurers are putting pressure on private equity groups. It claims that it can put pressure on real estate companies by
From a public investment perspective, Landmark Partners receives significantly more investment from North Carolina pension funds than any other public pension fund in the country, according to the Private Equity Stakeholder Project. Since Folwell became his treasurer in 2017, the North Carolina pension fund has invested his $2.6 billion in Landmark Partners. No other pension fund has invested more than $500 million, according to the Private Equity Stakeholder Project, and his median investment is $102 million.
The accounting firm confirmed that it has no immediate plans to change its investment strategy.
