Information Regarding Russian and Belarusian Investments held by the Minnesota State Board of Investment
February 22, 2023
During the 2022 legislative session, the Minnesota Legislature passed Minnesota Statutes Section 11A.245, which generally requires the SBI to liquidate its holdings in companies with their principal place of business in Russia or Belarus to the extent it is practicable.
In response to the legislation, the SBI has appointed an investment manager to manage the liquidation of SBI’s affected Russian and Belarusian holdings. As of April 2, 2022, the effective date of the legislation, MSBI held affected Russian and Belarusian securities with an estimated market value of $3.6 million. During the period from April 1, 2022 to December 31, 2022, the liquidation manager sold 26 securities (including partial sales) from the divestment list. As of December 31, 2022, 27 holdings remained on the divestment list, with an estimated market value of $1.1 million, reflecting that the SBI has divested nearly 70% of the market value of affected Russian and Belarusian securities it held as of the effective date of Minnesota Statutes Section 11A.245.
While the liquidation manager continues to make efforts to sell the remaining holdings, its ability to sell these securities is severely limited by both ongoing and newly imposed limitations in market liquidity due to trading restrictions stemming from economic sanctions. In particular, the market for Russian locally-listed equity securities remains effectively closed to U.S. investors, Russian sanctions aimed at restricting foreign capital flows remain in place, and more recently, the market for most Russian government bonds has become restricted to U.S. investors. SBI continues to closely monitor market and regulatory developments to assess opportunities to liquidate its remaining affected Russian and Belarusian holdings.
Thank you,
Jill E. Schurtz
Executive Director and Chief Investment Officer