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Global pension funds are seeking to offload or review their investments in Russia, following Western actions aimed at damaging the country’s economy following the invasion of Ukraine.
Pension schemes, representing tens of millions of members in the public and private sectors, typically have some exposure to Russia through emerging market funds, sovereign debt or indirect and direct holdings in funds and listed companies.
But action by world leaders to cut Russia off from the financial system, through sanctions, has led many pension plans to contact their fund managers to review their exposure to the country.
The Local Government Pension Scheme, the UK’s largest public sector pension scheme with around £300bn in assets, has advised its members to “discuss with their pools and asset managers the measures to take with caution” on investments exposed to Russia. The LGPS said it expected its relevant investments to be “minimal”, but was not more explicit.
The £90bn Universities Pension Scheme, the largest private sector pension scheme in the UK, holds around £450m, or 0.5% of its estimated £90bn portfolio end of January, exhibited in Russia. Among his top holdings in September 2021 were at least £160m of exposure to Russia, including an £81m stake in Sberbank, Russia’s largest bank, and £84m in the energy group Lukoil.
“With regard to our own position, there are clearly financial and moral arguments for a divestment with respect to our Russian holdings,” USS said in a statement.
“In light of these circumstances, we have imposed a moratorium on new long positions taken on all Russian assets, which goes beyond full compliance with UK government sanctions limiting trading in sovereign debt and other Russian assets,” he said.
Calpers, the largest public pension plan in the United States with about $480 billion in assets, has $900 million in exposure to Russia. The fund would not comment further but said it did not hold any Russian debt.