Quoted: David R. Kotok.
Divesting From Russia Proves Complicated for Pension Funds
Retirement systems plan to dump Russian holdings but face a lack of buyers and financial-services providers
By Heather Gillers - March 2, 2022
Pension funds around the world are reviewing their investments in Russia’s energy, banking and mining sectors in the wake of the country’s invasion of Ukraine.
Norway’s largest pension fund, KLP Group; Denmark’s AkademikerPension; and retirement systems in Connecticut and Rhode Island have announced plans to dump their holdings in Russia. Other U.S. pension funds from New York to California are taking stock of their Russia investments amid debate over whether teachers’ and firefighters’ retirement savings should be tied up in a country waging war on its neighbor.
Selling the holdings, however, is proving complicated.
Retirement systems divesting from Russia can expect to sell at a significant loss, pension officials and other asset managers said.
Pension funds willing to take the loss still might have difficulty unloading their positions as countries hand down sanctions and prospective buyers and financial-services providers back away from Russian investments, said David Kotok, chief investment officer at Sarasota-based Cumberland Advisors.
“Selling into a market which is either closing, doesn’t want to buy or is under restrictions is one of the most difficult things you can do,” Mr. Kotok said. “You have to have a payment mechanism that’s not interrupted. Even if I’m willing to take 10 cents on the dollar…how do I get paid?”
Continue reading at WSJ.com: https://www.wsj.com/articles/divesting-from-russia-proves-complicated-for-pension-funds-11646193559
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