Canadian pension fund managers and Asia-Pacific institutional investors also joined their European and American counterparts in moving away from Russian securities.
Alberta Investment Management Corp. will divest all of its Russian holdings in response to the escalating crisis in the Ukraine.
As of the market close on Feb. 28, AIMCo had less than C$99 million ($78 million) in direct and indirect exposure to Russian securities, representing about 0.06% of its more than C$160 billion in assets under management, the firm said in a news release issued March 1.
These Russian holdings accounted for 0.16% of AIMCo's entire C$48.7 billion public equities portfolio and represented AIMCo holdings that are externally managed, the firm added in the release. Beyond public equities, AIMCo — which manages the province's government, pension and endowment funds — does not have any direct exposure to Russia, the release noted.
The firm also noted that it would divest all Russian securities "as conditions permit, recognizing that at present trading in Russian securities has been curtailed by regulatory authorities."
AIMCo further noted that it has committed not to purchase any Russian assets "during the conflict or while financial sanctions are being applied to Russia or its leaders."
Other Canadian investment managers of pension funds are also seeking to unload their Russian holdings.
British Columbia Investment Management Corp., Victoria, the management company for public pension and other provincial assets, said in a news release issued March 1 it is "actively working" to divest the remaining Russian securities from its clients' portfolios in response to Russia's invasion of Ukraine.
The firm noted that it will seek to sell the C$107 million in Russian stock that remains.
"BCI has not only been working to sell the Russian shares in our clients' portfolios but also to have Russia removed from all global and emerging market indices," said Gordon J. Fyfe, BCI's chief executive officer and chief investment officer, in a statement.
"We don't normally comment publicly on our investment activities; however, given the egregious actions of Russia it is important to make an exception."
BCI noted that it began selling its holdings in Russian securities prior to the invasion, but added that "trading in these securities has now ground to a halt, given international sanctions, trading restrictions and Russia's ban on foreigners selling Russian securities."
BCI had C$199.6 billion in assets under management as of March 31, 2021.
A spokeswoman for Caisse de Depot et Placement du Quebec, Montreal, said by email that the manager's plan to dispose of its Russian holdings is "well underway."
"The (Russian) positions we still hold are marginal, primarily held through index funds," she added.
On Feb. 24, Bloomberg reported that Charles Emond, CDPQ's president and CEO, said, "We decided to sell all the (Russian) securities under sanctions, that's our position as an institution." Mr. Emond added that these securities are in the oil and gas and financial services sectors.
CDPQ has about C$420 billion in assets under management.
Moves by index providers MSCI Inc. and FTSE Russell to exclude Russian securities, plus Russia suspending trading and prohibiting foreign investors from executing security sales, gave cover for investors in Asia-Pacific.
Those moves effectively simplified the way forward for asset owners — such as New Zealand Superannuation Fund, the NZ$58.5 billion ($39.4 billion), Auckland-based sovereign wealth fund — that were looking to respond in nuanced fashion, dropping exposure to stocks and bonds of government-controlled Russian entities while retaining exposure to private firms.
In a joint statement early March 3, NZ Super, together with the NZ$50 billion Accident Compensation Corp., the NZ$5 billion Government Superannuation Fund and the NZ$1.9 billion National Provident Fund, all in Wellington, announced that they would sell "Russian Federation sovereign debt and the securities of majority Russian state-owned enterprises from their respective funds … as market conditions permit."
A NZ Super spokesman said that would have left his fund with modest exposure of NZ$6 million or NZ$7 million to privately owned Russian companies but MSCI's announcement made that an academic question: exposures to both government-owned and privately owned Russian entities will be sold, he said.
Others have been less nuanced.
Future Fund, the Melbourne, Australia-based, A$203.6 billion ($147 billion) sovereign wealth fund, announced Feb. 28 that it will be looking for opportunities to sell down its portfolio's A$200 million in holdings of Russian equities "as market conditions permit."
Likewise, Ian Patrick, chief investment office of Australian Retirement Trust, a A$230 billion, Brisbane-based super fund, in a news release March 3 said he instructed the fund's investment managers "to sell any remaining debt and equity investments" in Russia, Ukraine and Belarus, and not make any new investments in those countries.
Changes in benchmark index weightings could have a bigger impact on Japan's ¥199.3 trillion ($1.72 trillion) Government Pension Investment Fund, Tokyo, with Russian stock holdings of roughly ¥170 billion, or 36 basis points of GPIF's overseas stock portfolio, and ¥50 billion of Russian bonds, or 11 basis points of its overseas bond portfolio.
GPIF, in a statement, said while it is not permitted to allow political considerations to influence stock selection, it is continuing to monitor the situation and will strive to act in the best interests of members.
A subsequent statement, responding to a query about the latest moves by MSCI and FTSE removing Russian stocks from their indexes, said simply that when changes to indexes are made, GPIF's external managers adjust their portfolios based on those changes.
