Kentucky's teacher pension system says it sold its shares of major Russian bank
Reports that Kentucky's pension system for teachers is one of the top shareholders in the largest Russian bank are "completely false," the system's lawyer said Friday.
At the close of 2021, the Kentucky Teachers Retirement System was listed as the second largest institutional shareholder of Sberbank of Russia, whose stock prices are tanking amid the Russian invasion of Ukraine.
Beau Barnes, TRS' general counsel, said Friday TRS sold off its direct investments Feb. 23, losing $3.2 million of its initial $15.6 million investment. Russia invaded Ukraine the next day.
"We actually got out at a very good time because we were able to sell on the 23rd, when you could still get some good value on your Sberbank shares," Barnes said.
Barnes said the timing of the sale was a tactical decision by their external investment manager in response to the publicized threat of sanctions against Russia should it invade Ukraine.
TRS continues to have "de minimus, indirect exposure through two international funds managed by outside investment managers," Barnes said.
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"TRS’s remaining exposure to holdings in Russia is proportionately negligible in a portfolio of about $26 billion," Barnes said in a statement Friday.
About $30 million of TRS's $26 billion investment portfolio — around 0.12% — is in Russian investments, Barnes previously said.
Barnes added that their stake in Sberbank consisted of $15 million in investments over several years, beginning in 2017, with the loss at their Feb. 23 sale "offset by dividends of about $3 million paid over the timeframe, resulting in a net gain of about $200,000."
Around $35.3 million of the Kentucky Public Pension Authority's $22 billion portfolio is exposed to Russian securities, the group said in a statement Friday — about 0.15% of its funds.
David Eager, KPPA's executive director, said they're trying to determine the best financial strategy. He noted they're legally bound to manage assets from the best investment perspective, not for political reasons.
"As much as we want to support Ukraine during this invasion by Russia, and liquidate Russian investments in our funds, KPPA Trustees and employees are fiduciaries for the members and their beneficiaries," KPPA said in a statement Friday afternoon.
Other states have recently pulled out of Russian assets because of the country's invasion of Ukraine. Earlier this week, Connecticut pulled more than $218 million in pension funds from Russian companies.
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Prior to TRS saying the shares were sold, U.S. Rep. Thomas Massie, a Republican who represents Northern Kentucky, called the TRS investment "unfortunate."
"Kentucky Teachers Retirement System was the 2nd largest US 'institutional' holder in the Sberbank or Russia. It’s obviously part of a much larger portfolio, but still unfortunate and notable," Massie tweeted Friday morning.
Earlier this week, Massie was one of three representatives to vote against a House resolution backing Ukraine's sovereignty and calling for an immediate ceasefire.
Clarification: A previous version of this story said TRS was still the second largest shareholder at Sberbank. The sale of the shares in question was not publicly known and wasn't initially mentioned by a TRS representative.
This story may be updated.
Reach Olivia Krauth at okrauth@courierjournal.com and on Twitter at @oliviakrauth.
This article originally appeared on Louisville Courier Journal: Kentucky teachers pension system says it sold Russian bank shares
