Texas has millions invested in Russia, but Ukraine war has set off scramble to back out

AUSTIN — Investment funds managed by Texas’ state authorities have practically $220 million invested in Russia as of March 31, probably a dramatic drop-off because the nation’s invasion of Ukraine.

The managers of state-run funding funds such because the Teacher Retirement System have been scrambling for weeks to divest from Russia because the nation has been hit with drastic financial sanctions, decreasing many investments there to junk.

Financial managers straight and not directly tied to Texas’ funding funds have been promoting off in addition to “zeroing out” — decreasing the anticipated worth of an funding to $0 on the stability sheet — many investments that stay on the books, stated Mike Reissig, the Texas comptroller’s workplace’s chief funding officer.

Texas’ direct funding in Russia was restricted earlier than the invasion of Ukraine, and whereas the $220 million remaining is roughly sufficient cash to purchase practically three F-35 fighter jets, it represents a pittance of the state’s gargantuan funding swimming pools, valued at greater than $450 billion.

Reissig offered the figures Wednesday to a gathering of the Senate Committee on Finance, throughout which Sen. Paul Bettencourt introduced that each state senator had signed a letter to Lt. Gov. Dan Patrick calling for work to start on legal guidelines requiring the state to boycott funding into corporations that make investments in Russia.

“It’s an important statement,” Bettencourt, a Houston Republican, stated of the letter. “We have to underline all of this with the fact that we simply cannot do business, we simply cannot be an investing party as the state of Texas in the Russian Federation under its current leadership as long as they’re conducting an absolutely aggressive war.”

Reissig stated Texas’ funding in Russia probably has decreased considerably in the previous six weeks. He solely might converse straight for the Texas Treasury Safekeeping Trust, a $114 billion fund overseen by the comptroller’s workplace. More particular figures concerning Russian divestiture in different funds weren’t offered.

In February, Comptroller Glenn Hegar requested the treasury belief’s managers to determine and start divestment from Russia. They discovered no direct funding in the Moscow change and $18.6 million in oblique funding in funds managed by exterior managers.

As of March 31, the belief has divested 93% of its funding in Russia, with about 70% bought and 30% of these values diminished to zero.

“That’s pretty common at this point,” Reissig stated of zeroing out the values of Russian investments which may now be thought-about nugatory.

The dialogue sparked some speak amongst senators Wednesday of increasing a Texas embargo on international funding to one other doable adversary — China. Jacksonville Sen. Robert Nichols stated the Senate might think about that in subsequent 12 months’s legislative session.

No figures have been instantly accessible on the scope of Texas’ funding in China, but it’s probably fairly massive.

“We have a lot invested in China,” stated Houston Republican Sen. Joan Huffman, the finance committee chairwoman.