Alberta’s public-investment manager says it has started divesting all of its small measure of Russian holdings in response to the invasion of Ukraine and the ensuing humanitarian crisis.
Alberta Investment Management Corp., or AIMCo, which holds more than $160-billion in assets for provincial pension plans and endowments including the Alberta Heritage Savings Trust Fund, said in a news release that the decision is “both values, and value-driven” and reflects the change in geopolitical risk.
At the end of last week, AIMCo’s exposure was about $159-million, or roughly 0.1 per cent of its total assets, according to the fund manager’s spokesperson Dénes Németh. But by this week, that number had dropped.
“Our equities team has succeeded in divesting some of our holdings in Russian securities in difficult markets,” AIMCo chief executive Evan Siddall tweeted on Tuesday. “They are now below $99 million, down significantly since yesterday, and are a small fraction of our clients’ portfolios.”
AIMCo’s news release also said the Russian holdings now represent 0.16 per cent of the entire $48.7-billion public-equities portfolio and areexternally managed. “Beyond public equities, AIMCo does not have any direct exposure to Russia.”
Alberta Premier Jason Kenney said Tuesday he appreciated that Mr. Siddall was “taking measures immediately to liquidate those small Russian holdings that they have.”
Mr. Kenney has taken a hard line on Russia since last week, when he called for global sanctions on Russia’s oil and gas industry and for Ottawa to be “relentless” in freezing the Canadian assets of allies of Russian President Vladimir Putin. On the latter point, he noted provincial governments don’t have that power.
When asked about whether he knows of Russian investments in Canada’s oil and gas industry, the Premier replied that he doesn’t have “a comprehensive readout of what Russian interests may directly or indirectly be involved in the Canadian energy sector.” Alberta Energy told the Globe and Mail that the department doesn’t have a tool to track all Russian investments, but is searching to see if there are any oil or natural gas leases held by Russian companies.
“We have not found any yet,” Jerry Bellikka, chief of staff to Energy Minister Sonya Savage, said Tuesday.
Western countries have already imposed sanctions on some parts of the Russian economy, but given that oil and gas comprise more than 60 per cent of Russia’s export revenues, cutting off those shipments is one of the main economic weapons left that could hurt the country.
Canada announced a ban on Russia’s oil shipments on Monday, but the move is somewhat symbolic, because this country has not bought any Russian crude since 2019. However, Natural Resources Minister Jonathan Wilkinson said Tuesday “this new ban will ensure we import none going forward.” Other Western powers, far more reliant on Russian imports and worried about a sharp spike in already high fuel costs, have so far been reluctant to take the same step.
Mr. Kenney continued on Tuesday arguing that Canadian oil and natural gas production, and export facilities, can displace “conflict oil” from Russia and other dictatorships. He has long lamented that the Keystone XL pipeline, which would have allowed for vast new volumes of Canadian heavy oil to go directly to the U.S. Gulf Coast – a project in which the province was a direct investor – was turned down by U.S. President Joe Biden in January, 2021. However, Mr. Kenney said he believes U.S. lawmakers are rapidly coming to terms with the strategic importance of North American oil and natural gas production.
“I do believe we have been – to coin a phrase – mugged by reality here, and the world is now seeing what Alberta has been saying for years,” he said. The Premier said contrary to what critics might say, he doesn’t relish the current situation, or that the conflict in Ukraine is driving energy prices higher. “This is not about Alberta cynically taking advantage of this gross invasion and political instability. This is Alberta saying that we can be part of a long-term solution.”
Mr. Németh said he believes AIMCo is amongst the first provincial pension fund managers to divest of Russian holdings, and to issue a statement saying as much. But he noted that the Caisse de dépôt et placement du Québec said last week it recently sold hundreds of millions of dollars in stock of seven Russian companies.
Other Canadian pension plans seem to avoid owning Russian public companies. A search of S&P Global Market Intelligence shows no Russian public-company holdings for Canada Pension Plan Investment Board, which makes broad disclosure of its positions.
Most major Canadian pension plans have more limited or no disclosure of equity holdings, outside of what securities regulators in various countries require.
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