UK’s biggest private pension fund sells off its Russia-linked assets

Universities Superannuation Scheme says it has offloaded about half £450m holdings in recent weeks

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Last modified on Tue 1 Mar 2022 04.22 EST

The chief executive of the UK’s biggest private pension scheme is seeking to offload its £450m of assets linked to Russia, saying there is a moral as well as financial imperative for companies to do so after the invasion of Ukraine.

Simon Pilcher, the head of the Universities Superannuation Scheme, said it had sold off about half of its portfolio of investments connected to Russia in the last few weeks.

“We think there is a clear financial as well as a moral case for divestment with respect to our Russian holdings,” said Pilcher, speaking to BBC Radio 4’s Today programme on Tuesday.

“Morals drive finance and if you are a financial investor and you don’t think about the moral impacts of what you are doing you are both shortsighted and, dare I say it, immoral.”

Pilcher said the moves by the oil and gas companies BP and Shell, which have announced loss-making exits from investments in Russia’s energy industry worth tens of billions of pounds, showed that there was no case for continuing to trade with Russia.

“We think that Russia has placed themselves outside of all norms,” he said. “There are very few people that have just been listening to the statements regarding Shell and BP [who wouldn’t think] there is very little appetite for anyone to trade with Russia under these circumstances. It is very hard to see how Russian investments are a sound financial investment. And that completely ignores – and we are not – the moral case.”

Pilcher said his team at USS, which has about 500,000 pension customers and £90bn in investments, had found it difficult to find buyers for its Russian assets as the country and its institutions had become toxic for traders since the invasion.

“In the current environment there is very little trading,” he said. “It is exceptionally difficult to get a price on anything. We have halved our equity investments relating to Russia in the last several weeks.”

Pilcher said that about 0.5% of its £90bn portfolio, a “fairly modest amount”, was linked to Russia.

On Monday, KLP, Norway’s largest pension fund, said it would sell off its 500m Norwegian kroner (£42m) of investments in 22 Russian firms including the energy companies Gazprom and Rosneft and the banks VTB and Sberbank.

The Norwegian government has also announced that its $1.3tn (£970bn) sovereign wealth fund, the world’s largest, would divest from Russia.

Last week, the Church of England announced it had sold all £20m of investments in Russian companies in response to what the archbishops of Canterbury and York described as Vladimir Putin’s “act of evil” in Ukraine.

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