Kentucky Teachers’ Pension Loses $3 Million After Selling Russian Investments

Update: The loss reported in this story has been offset by the dividend income paid over the investment time frame. This resulted in a net gain of 200,000 for the pension fund according to their updated press release. The dividend income was not reported in the original press release that this story was based upon.

The Kentucky Teachers’ Retirement System admitted to losing $3 million due to selling its direct investment in the Russian bank Sberbank. The fund initially had invested $15.6 million in the bank in March 2017. When the fund sold its shares on February 23, they were worth $12.4 million.

Nevertheless, Kentucky evaded even further losses by selling the day before Russia’s invasion of Ukraine. Had the pension waited an additional week, shares in the bank would have lost an additional 90% of their value.

Kentucky state Treasurer Allison Ball said in a public statement that the pension fund still holds some Russian investments.

“TRS does not currently hold any direct holdings in Russian companies but maintains a foreign investment portfolio that includes minor Russian investments,” she said. “The Kentucky Employees Retirement System and County Employees Retirement System have direct and indirect Russian investments.”

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Ball encouraged the state to further divest its remaining investments in Russia.

Other institutional investors around the country also are facing great losses due to the plummeting value of Russian assets. According to the Financial Times, 26 major asset management companies, including JP Morgan and BlackRock, have had to freeze funds with Russian assets.

According to Moscow’s exchange data, foreign investors owned $86 billion in Russian equities at the end of 2021. Hedge funds, pensions and asset management funds were among the biggest holders of Russian equities.