MOSERS Board of Directors votes on disposal of Russian-related investments pension fund

Missouri’s state employee retirement system will eliminate Russia-related investments and prevent investment managers from making future purchases of Russian securities, the board decided Thursday.

The board held a special meeting in response to the Appeal from State Treasurer Scott Fitzpatrick to divest. After a brief discussion, including a presentation by Chief Investment Officer TJ Carlson which showed that the current Russian assets are essentially worthless, the board unanimously approved a motion by Fitzpatrick to end all involvement in the Russian assets. .

“We’re doing the right thing and it looks like a lot of things are going to happen organically in the markets,” Fitzpatrick said after the vote.

The pension system, known as MOSERS, has no direct ownership of Russian securities, but does hold a small portion of its $13.4 billion portfolio in funds that own assets in markets around the world whole. The investment, worth $18.6 million as of Dec. 31, had lost 90% of its value Wednesday to about $1.6 million, Carlson told the board.

On Wednesday, the fund’s manager, Morgan Stanley Capital Investments, announced that it reclassify Russian investments to a stand-alone market instead of an emerging market fund, “at effectively zero price and closing on March 9, 2022”.

That means the Russian asset portion of MOSERS’ initial investment in those funds is worthless, Carlson said.

From Russia invaded Ukraine on 24 February, several states have taken steps to eliminate their Russian-linked holdings. President Joe Biden has imposed severe sanctions on Russia, like many other countries.

In a presentation to the board, Carlson said MOSERS’ portfolio was also reviewed for investments related to sanctioned businesses and individuals.

“We have no exposure to sanctioned companies,” Carlson said.

The three largest state-run funds outside of MOSERS are the Local Government Employees Retirement System, or LAGERS, the Public Schools and Education Employees Retirement Systemor PSRS/PEERS, and the Missouri Department of Transportation and Highway Patrol Employee Retirement System, or MPERS.

The PSRS/PEERS Board of Directors has set Friday morning meeting to discuss its Russia-related investments. The PSRS/PEERS fund is the largest in the state with $57.9 billion in assets and total exposure of about $138.9 million in Russian securities, communications director Susan Wood wrote on Tuesday.

LAGERS holds $8.3 million in Russian securities in its $10.3 billion asset portfolio, Elizabeth Althoff, legislative and communications coordinator, wrote on Tuesday. The next meeting of the LAGERS Board of Directors is scheduled for March 25.

The resolution adopted by the MOSERS Board of Directors prohibits any future direct investment in Russian companies or government securities and states that the system will not work with a fund manager investing in funds that make such investments .

The war has, in many ways, made it unlikely that anyone outside of Russia will be able to trade Russian stocks or bonds.

Over the past two days, Russia has succeeded more difficult to sell assets held by foreigners and prohibits the payment of dividends and interest to holders of foreign stocks and bonds, Reuters reported. The Russian agency overseeing the sale of securities said it was limiting payment options on Russian securities for individuals and foreign companies, as well as the right to transfer those assets.

The Missouri House voted 143 to 0 on Thursday in favor of a resolution to “condemn in the strongest possible terms Vladimir Putin’s violent attack on the people of Ukraine and strongly endorse swift and severe economic sanctions and strict export controls that President Biden’s administration has imposed.” on Russia.

The MOSERS board’s decision is in the spirit of that resolution, said Pro Tem Chairman John Wiemann, one of the lawmakers on the 11-member board.

“It’s completely consistent with how the whole state thinks about how we should handle our relationship with Russia,” Wiemann said.

Anything happening in Missouri is unlikely to impact Russia’s actions, Gov. Mike Parson said during remarks to reporters and editors at the governor’s mansion for Missouri. Press Association Day. He said he “fully supports” Ukraine and its people and said international sanctions should be tightened.

“If we were asked tomorrow to do something,” Parson said, “I would respond to that request, whatever it was.”

Dolores W. Simon