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B.C. public-sector pension fund to drop Russian companies

B.C. Investment Management Corporation said Tuesday it is “actively working” to sell the remaining Russian securities from its clients’ portfolios.
The B.C. Investment Management Corporation plans to divest its holdings in Russian companies, which amounted to more than $450 million in investments last year. DARREN STONE, TIMES COLONIST

The province’s public-sector pension fund says it has begun to divest its holdings in Russian companies in light of that country’s war on Ukraine.

On Tuesday, B.C. Investment Management Corporation (BCI) issued a statement saying it is “actively working” to sell the remaining Russian securities from its clients’ portfolios.

“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. “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 started selling its holdings in Russian securities prior to the invasion, it said, but trading in these securities has now ground to a halt, given international sanctions, trading restrictions and Russia’s ban on foreigners selling Russian securities. “Regardless we will continue to work to sell the $107 million in Russian stock that remains.”

BCI manages nearly $200 billion in assets, mainly on behalf of 12 public-sector pension plans, including the Public Service Pension Plan, the Municipal Pension Plan, the Teachers’ Pension Plan, the College Pension Plan, and the WorkSafeBC pension plan representing almost 700,000 British Columbians.

BCI holdings included more than $450 million in Russian-owned companies in 2021, including $103.9 million in shares in the state-owned bank Sberbank and $83.85 million, $32.2 million and $19.16 million in Russian energy giants Lukoil, Rosneft Oil and Gazprom respectively. The Russian companies include diamonds, metals and mining, oil and gas, energy, food, finance, and gold.

An online petition quotes members saying they don’t want to be “bankrolling [Vladimir] Putin’s regime and fossil fuels.” They say divesting from the Russian companies now will not hurt the bottom line for pension-plan clients, given these companies make up just 0.25 per cent of BCI’s overall $200-billion assets portfolio.

“There is zero justification, moral or financial, for continuing to hold shares in Russian companies, many of which are now subject to international sanctions. In line with Canada’s actions, and in solidarity with the people of Ukraine, BCI should do its part,” the petition says.

Premier John Horgan said in question period on Monday his government would not invest in these Russian companies but BCI is independent of government.

“This is something we would want them to act upon,” Horgan said. “But we would not want to interfere in a fund that is designed to protect trustees and pensioners. They have a board to make those decisions and we are hopeful they will.”

The B.C. Liberals continued on Tuesday to demand that BCI divest its holdings in Russian companies, saying provinces like Quebec and Alberta are already doing so.

“British Columbians, in times like these, expect the premier to act quickly,” said official opposition leader Shirley Bond. “We may be a small jurisdiction but it is important that we do absolutely everything we can and this is something that this minister and this premier can and should do.”

In response to questions from Bond, Finance Minister Selina Robinson said that as finance minister, she is legislatively prohibited from being involved in investment decisions. Alberta has different legislation, she said, adding, however, “we’ve heard from BCI Management Corporation that they are taking action, they are engaging with their members, with their clients.”

Robinson said the province continues to identify ways to make its voice heard globally on Russia’s illegal incursion into Ukraine, including looking into land-ownership records related to Russian oligarchs, “so we can make sure we are doing everything that we can to bring to bear on this situation.”

On Tuesday, Alberta Investment Management Corporation, AIMCo, said it will divest all Russian holdings in response to the invasion of Ukraine and ensuing humanitarian crisis.

Alberta’s investment manager said its decision reflects risk to the underlying value of the respective companies.

“We have a fiduciary obligation to our clients to act in their best interests and we believe this decision aligns with our investment objectives, policies, and prudent investment of capital,” said AIMCo.

At market close on Feb. 28, AIMCo had less than $99 million in direct and indirect exposure to Russian securities, accounting for 0.06 per cent of AIMCo’s more than $160 billion in assets under management and 0.16 per cent of the entire $48.7 billion Public Equities portfolio.

“AIMCo also commits that it will not purchase Russian assets during the conflict or while financial sanctions are being applied to Russia or its leaders.”

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