6 of 11 investors won’t reveal if they are divesting from Russia
More than half of the major global investors contacted by AsianInvestor would not reveal whether they are divesting from Russian assets - Temasek, AustralianSuper, LGIA Super, Allianz, APG, OMERSs all declined to say.
AwareSuper and four New Zealand superannuation funds, however, said they were divesting.
Paul Ewing-Chow, director of public affairs at Temasek, told AsianInvestor that it is complying with Singapore’s sanctions, announced on 28 February, but declined to comment on whether the fund was divesting, adding that its underlying exposure to Russia and Ukraine is small.
“We have a nominal legacy exposure to a couple of third-party funds in Russia, and have no active investment activity in Russia or Ukraine. Some of our portfolio companies have holdings in the region, though we understand these are not material in value,” he said.
Singapore’s sanctions on Russia include blocking certain Russian banks and financial transactions connected to Russia.
Despite Australia’s Treasurer Josh Frydenberg declared expectation that Australian super funds would divest all Russian holdings, many of the largest funds have declined to say what they are doing.
AustralianSuper did not respond to a request to comment by AsianInvestor on 3 March.
Last week it declined to comment when approached by Australian Financial Review (AFR). Its investments include $80m in three oil and gas companies, Gazprom, Lukoil and Rosneft, and $136m in Sberbank, Russia’s biggest bank. LGIA Super declined to comment when approached by AsianInvestor.
A spokesperson for AwareSuper told AsianInvestor it was divesting from its A$45m of Russian assets.
“We took immediate steps to sell down our direct exposure to Russian assets in our portfolio last week. We had identified an extremely small direct exposure to Russian assets of around 0.03% of our A$150 billion funds under management. We have no direct exposure to Ukraine. We’re also issuing instructions to all the asset managers we work with to ensure no new investments in Russia come into our portfolio,” they said.
On 3 March four New Zealand super funds said they were dumping Russian assets. The NZ Super Fund (NZSF), Accident Compensation Corporation (ACC), Government Superannuation Fund (GSF) and National Provident Fund (NPF) said they would exclude Russian sovereign debt and all securities of majority Russian state-owned enterprises.
As of 28 February, NZ Super Fund held approximately NZ$9m of shares in companies from the Russian Federation via passive funds, which are being sold following the removal of Russia from MSCI’s emerging markets index. It is also selling NZ$3.13m in Russian bonds.
“Exiting Russian sovereign debt and the securities of majority Russian state owned companies is obviously the biggest lever NZ Super Fund and other international investors have to push for a peaceful resolution to the crisis,” a spokesperson told AsianInvestor, adding that NZ Super Fund has statutory independence from the New Zealand government for its investment decisions.
BEYOND ASIA PACIFIC …
A spokesperson from Dutch pension group APG declined to say whether it was divesting from the €770 million in Russian equities it owns, via the local Russian market and via ADRs and GDRs in New York and London.
“We are not invested in Russian bonds because of the EU Arms Embargo. Our exposure to Ukraine is currently around €249 million,” they said, adding that prior to the invasion part of its position in Russian oil and gas companies was been sold as a result of the decision by its largest fund, ABP, no longer to invest in producers of fossil fuels.
A spokesperson for Allianz Group told AsianInvestor declined to say whether it had or intended to divest from the €2.43 billion it has invested in Russia and Ukraine (0.3% of its total group investment portfolio).
“We had already weeks ago frozen our existing portfolio. Selling off our existing positions would be allowed, but they trade currently at a significant discount and are not liquid either,” they said.
A spokesperson for OMERS, the Canadian fund, told AsianInvestor that it was at arm’s length from the government, with its own independent governance structure.
According to a statement posted on its website on 3 March: "Russia is not an investment market for OMERS, nor do we hold any securities of Russian listed entities. We will not change this position so long as the attacks on Ukraine continue."
On February 28, Norway’s government told the country’s $US1.3 trillion sovereign wealth fund to start selling its Russian assets, all of which are equities, held in 51 companies. However, on March 3 the fund’s CEO Nicolai Tangen told a news conference that the equities, which were valued at $3bn at the end of 2021, were effectively worthless. “They are pretty much written off,” he said.
Two thirds of the value of the Russian holdings, are in 3 companies: Gazprom, Sberbank and Lukoil. 80% of the equities are listed in Russia, where the major stock exchange, Moscow bourse, is closed.
Since February 28, Russian market brokers have been forbidden by the country’s central bank to buy Russian securities from foreign sellers.