CalPERS divesting from companies with ties to Iran, Sudan

CalPERS board agreed Monday to a plan to divest shares of the eight public companies doing business in Iran and Sudan, confirmed spokesman Clark McKinley.

Mr. McKinley said the Sacramento-based California Public Employees’ Retirement System’s interest in the eight companies is valued at $140 million.

He said CalPERS had $2 billion invested in 47 companies that operate in the two countries when the first California divestment laws were enacted in 2006. Since then, the retirement system has successfully put pressure on companies to withdraw from Iran and Sudan, leaving only eight companies left in CalPERS’ portfolio.

“The cost of continuing to hold the stock of these eight companies is greater than the value of divesting them,” said Rob Feckner, CalPERS board president, in a statement. “Consistent with our fiduciary duty as trustees, we’re taking this step in the best interest of the fund.”

CalPERS officials have been spending $425,000 a year to pay a consultant to monitor the system’s investments in companies in the two countries, according to CalPERS investment committee documents.

Mr. McKinley said the $240.5 billion system will not give a timetable for selling off the shares. “We’re not specifically identifying the eight companies because we don’t want to devalue the stock before we sell them off, gradually,” he said in an e-mail to Pensions & Investments.