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

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

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

Monetary managers immediately and not directly tied to Texas’ funding funds have been promoting off in addition to “zeroing out” — lowering 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 announced 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 firms that spend money on Russia.

“It’s an essential assertion,” Bettencourt, a Houston Republican, stated of the letter. “We’ve got to underline all of this with the truth that we merely can’t do enterprise, we merely can’t be an investing celebration because the state of Texas within the Russian Federation underneath its present management so long as they’re conducting a completely aggressive warfare.”

Reissig stated Texas’ funding in Russia seemingly has decreased considerably prior to now six weeks. He solely may communicate immediately for the Texas Treasury Safekeeping Belief, a $114 billion fund overseen by the comptroller’s workplace. Extra particular figures relating to 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 within the Moscow change and $18.6 million in oblique funding in funds managed by outdoors 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 fairly widespread at this level,” Reissig stated of zeroing out the values of Russian investments that may now be thought-about nugatory.

The dialogue sparked some speak amongst senators Wednesday of increasing a Texas embargo on overseas funding to a different potential adversary — China. Jacksonville Sen. Robert Nichols stated the Senate may take into account that in subsequent yr’s legislative session.

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

“We’ve got quite a bit invested in China,” stated Houston Republican Sen. Joan Huffman, the finance committee chairwoman.