Oklahoma Teachers’ Retirement System, Oklahoma City, is taking steps to comply with Governor Kevin Stitt’s executive order to protect state assets at risk of being frozen, seized or appropriated by China, Russia and other foreign adversaries.
In a Nov. 20 letter to Stitt, Stephen Streeter, the chair of the $22.8 billion pension fund, detailed plans to divest $36 million from Hong Kong listed securities and Hong Kong-based corporations in passively managed index funds.
In addition, Oklahoma Teachers will monitor $206 million in actively managed portfolios with exposures in China, Hong Kong and Russia.
“Our investment managers, as retained fiduciaries, should continue to monitor and manage country exposures in actively managed portfolios because they can act quickly and efficiently without further board direction,” Streeter said in the letter.
The executive order, issued in June, outlines measures that state agencies, such as the Office of Management and Enterprise Services, and state pension funds can take to bolster Oklahoma’s defenses against potential threats posed by foreign adversaries. It specifically directs the state’s retirement systems with investments in countries considered foreign foes — namely China, Iran, North Korea, Russia, Cuba and Venezuela — to develop divestment plans and electronically submit them to the governor.
“Under President Biden, the United States is dealing with an aggressive and emboldened Chinese government, and states have to be prepared to deal with those consequences,” Stitt said in a news release in June.
Oklahoma Teachers’ planned divestment from Hong Kong investments follows an earlier divestment from mainland China securities prior to Stitt’s executive order.
At a board meeting in April 2023, Oklahoma Teachers decided to reduce its geopolitical risk by divesting exposure to mainland China securities under passive management in the portfolio and consequently divested $140 million of those securities in May 2023.
“As fiduciaries charged with making investment decisions for the system, the board regularly monitors the fund’s exposure in international investments,” Streeter said.
