Some 60 investors representing $2.1 trillion in managed assets joined the NCAA, entertainers and more than 200 businesses in calling for North Carolina to repeal its law limiting LGBT protections against discrimination.
“While the U.S. economy continues to grow, quite frankly North Carolina appears to be headed for what I would call a state-government-inflicted recession,” said Matt Patsky, chief executive officer of Trillium Asset Management. Trillium has more than $2 billion in assets under management.
Patsky spoke this week at a news conference alongside some of the investors who signed a statement calling for repeal of the law known as HB2. Trillium was one of the organizers of the statement, along with environmental research group Croatan Institute and the New York City comptroller, Scott Stringer. Stringer was unable to attend because of a New York ban on travel to North Carolina, Patsky said.
“As long-term investors, we can’t sit idly by as HB2 undermines fundamental human rights at our expense,” Stringer said in the statement. “For the last 25 years, New York City’s pension funds have pushed more than 100 companies to enact non-discrimination policies that protect LGBTQ individuals and ensure they attract, retain, and promote the best and the brightest. These policies are essential if we want companies — and our economy — to succeed, and we can’t let a hate-filled law get in the way.”
State legislators were enraged when the Charlotte City Council passed an ordinance expanding protections for lesbian, gay, bisexual and transgender people. During a one-day special session in March, Republicans passed a state law that blocks any municipality from expanding protections against sexual discrimination in public accommodations to LGBT people and ordered public schools and universities to ensure that students use restrooms corresponding to the sex on their birth certificates.
Earlier this month, Gov. Pat McCrory and GOP legislators offered to consider rescinding the law, but only if the Democrats who pushed for Charlotte’s ordinance would essentially admit they were wrong, something the council hasn’t done.
Meanwhile, the NBA pulled its All-Star Game from Charlotte. The NCAA earlier this month took the unprecedented step of pulling seven championship events from the state over its objection to the law. Two days later, the ACC did the same thing — relocating all 10 of its neutral-site championships from the state the conference has called home since its founding in 1953.
Performers including Bruce Springsteen, Pearl Jam and Maroon 5 canceled concerts in North Carolina, and more than 200 business leaders signed a letter to McCrory. The Williams Institute, which is part of the UCLA School of Law, has said HB2 could cost the state as much as $5 billion in lost federal funding and business investment.
“This latest attack on North Carolina values is being coordinated by the same people who manage the New York City pension fund that is on the verge of an ‘operational failure,’ according to a recent report,” McCrory said in a statement released by his campaign. “For New York hedge fund billionaires to lecture North Carolina about how to conduct its affairs is the height of hypocrisy.
McCrory is seeking re-election in a campaign against Democratic Attorney General Roy Cooper, who opposes the law.
Some clients are seeking “North Carolina-free portfolios,” including divestment of municipal bonds, Patsky said, and he expects that number to grow if the law isn’t repealed.
Those who signed the letter include representatives of North Carolina-based groups such as Investors’ Circle and the Mary Babcock Reynolds Foundation. Others who signed are from Morgan Stanley Investment Management, John Hancock Investments and RBC Wealth Management.
“This fallout is real,” said Bonny Moellenbrock, executive director of Investors Circle, which she said has invested $200 million in more than 330 start-ups. “It has had a devastating impact on our reputation and that has a direct impact on entrepreneurs’ ability to grow their business here.”