Pension funds for New York state and New York City, as well as the Pennsylvania State Employees’ Retirement System Board, have joined a growing number of institutional investors divesting from Russia.
New York State Comptroller Thomas DiNapoli said he directed his staff to prohibit all new investments in Russian companies and review the $279.7 billion New York State Common Retirement Fund’s current investments and assess whether they present financial risks that warrant further restrictions or divestment. He said he is also reaching out to the pension fund’s investment managers to urge them to conduct similar examinations to mitigate investment risk and minimize market impact.
DiNapoli estimates the pension fund has $110.8 million in public equity investments in Russian companies, including direct holdings and co-mingled funds.
“Russia’s unlawful invasion of Ukraine has led to unprecedented sanctions against Russian companies and individuals,” DiNapoli said. “While American sanctions already prohibit investments in many Russian companies, I believe it is prudent to freeze purchases in all Russian companies due to the situation’s unpredictability and the likelihood that conditions will deteriorate. This will ensure that the fund does not increase its minimal exposure to the Russian economy while completing its divestment review, consistent with my fiduciary duty.”
Meanwhile, the trustees of the $88.2 billion New York City Employees’ Retirement System voted to approve a resolution directing Comptroller Brad Lander to carry out the divestment of the system’s investments in securities issued by Russian companies. NYCERS, which has more than 350,000 active members and retirees, said it held approximately $31.1 million in Russian securities as of February 25.
“As the unlawful invasion of Ukraine by the Putin regime continues, the investment risks, economic volatility, and calls for an immediate end to these acts of aggressions by the global community have only grown,” Lander said.
Under the resolution, the divestment extends to all of NYCERS’ public equity and public fixed income investments in securities issued by Russian companies and include both active and passive products. It also requires managers of passively managed accounts to reinvest the funds from divested securities pro rata and managers of actively managed accounts to reinvest funds consistent with the investment objectives and strategies of their mandates for NYCERS.
Meanwhile, the Penn SERS board of trustees has directed staff, hired managers and consultants to take all actions necessary to divest the pension fund of all Russia-related assets “in a prudent manner and within a reasonable time.”
Penn SERS Board Chairman David Fillman said the board was briefed by its staff and outside consultants on the “heightened volatility, risk, and potential for losses” due to exposure to Russia-related investments. As of March 3, the Penn SERS fund had approximately $7 million, or 0.02% of its total fund value, invested in Russia-related investments.
The pension fund also reported a 17.24% return on investment in 2021 and approved $400 million in new private equity investments.
Tags: Brad Lander, invasion, New York State Common Retirement Fund, NYCERS, Pennsylvania State Employees’ Retirement System Board, PSERS, Putin, Russia, the New York City Employees’ Retirement System, Thomas DiNapoli, Ukraine, war