In response to the ongoing war in Ukraine, more Canadian public sector institutional investors are announcing plans to exclude Russian assets from their portfolios.
The Investment Management Corp. of Ontario and the Ontario Pension Board will divest their portfolios of existing Russian assets as soon as possible. Efforts to immediately divest are currently impossible as a result of new legislation by Russia’s parliament that prevents the sale of assets by foreign investors.
The IMCO has $115 million in direct and indirect positions in Russian securities and currency, representing 0.16 per cent of its total assets under management, while the OPB has $107 million in direct and indirect positions in Russia, worth about 0.3 per cent of its total portfolio.
The Ontario Municipal Employees Retirement System and the Public Sector Pension Investment Plan, which don’t have direct exposure to Russian assets, announced they won’t be making allocations to the Eurasian economy.
According to a press release, published by the OMERS, it had avoided investing in the Russian economy prior to the recent escalation of the conflict between Russia and Ukraine. “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. OMERS will support government sanctions in solidarity with efforts to bring peace to the region and our hearts are with the Ukrainian people, there and everywhere.”
In a statement, PSP Investments noted it had indirect exposure to the Russian economy through its passive index replication activities and external manager investments. “PSP Investments has taken steps as of late last week to divest of all its Russian investments. All residual positions will be written down to zero and PSP Investments is committed to exiting this market as soon as market conditions permit.”
In addition, the Canada Pension Plan Investment Board released a statement to clarify what it calls “false and outdated data” about the CPPIB’s assets in Russia, noting it made a deliberate decision several years ago to avoid Russia as one of its markets.
“As a result, we have not undertaken any acquisitions in Russia. This was made public and profiled in national news publications. Indirect exposures are insignificant, stemming externally from widely used global indices designed specifically by index companies to provide investors efficient diversification to virtually every investible market. We engaged early on with the companies that create these indices and understand that any exposures — even relatively insignificant — will be removed.”