Merseyside Pension Fund addressing millions of pounds invested in Russian assets

The Merseyside Pension Fund (MPF) has around £19 million invested in Russian companies and bonds.

Thousands of government workers across Liverpool have money invested in the MPF, which is now worth more than £10.9 billion.

The fund released a statement stating it ‘deplores the aggression by Russia in its unwarranted invasion of Ukraine’ and is currently wrestling with the problem of what to do with their Russian investments.

“It’s not as simple as flicking a switch,” Pat Cleary, chair of the pensions committee which oversees the MPF, told LiverpoolWorld.

“You have to also consider who would buy these assets that have plummeted in value, you might be selling them to people in Russia or allies of the Kremlin. Would that be the right thing to do? It is a rapidly evolving situation.”

The MPF said that less than a quarter of one per cent of its assets are invested in Russian companies and bonds.

An MPF spokesperson said: “Based on the most recent information available, the pension funds exposure in relation to Russian investments was around £19 million.”

The majority of the investment is through third party equity fund managers and corporate bond holdings.

The fund is also directly invested in Polymetal, a leading Russian gold and silver producer with assets in Russia and Kazakhstan, according to Green Party councillor Cleary.

It was announced on Monday that the British chair and five members of the multinational board at Polymetal had all stepped down.

Cllr Cleary, a Wirral Council member for Birkenhead and Tranmere, told LiverpoolWorld: “The MPF is keen to join the overwhelming outrage over what is happening in Ukraine and is taking steps to address that.

“There are complicating issues such as the Russian stock market closing, sanctions relating to financial transactions with Russian companies.”

‘Significant challenges’ in divesting from Russian assets

The MPF said it is following advice from the Local Government Pension Scheme (LGPS) Advisory Board.

The LGPS board acknowledged in guidance to pension funds that there may be ‘significant challenges’ to divesting from Russian assets including the closure of the Russian stock exchange and the ‘potential lack of buyers for such assets resulting in significantly depressed values’.

A board spokesperson confirmed they were collecting data on exposure to Russian investments from LGPS fund authorities. He said initial responses suggest that there are no direct holdings over 1% with the average being around 0.25%.

The Merseyside pensions committee met at the end of last month and discussed responsible investment and human rights engagement, including investments in companies with links to Israeli settlements in the Occupied Palestinian Territories (OPT).

Cllr Cleary said that many people had contacted the MPF with concerns that their investments were linked to the OPT and said the committee was still actively looking into the issues as part of a ‘broader responsible investment policy’.

The committee is due to meet again in June.