Funds empty their clips as Sudan divides

As Sudan divides into north and south, CalPERS and other UN PRI funds are divesting shares in public companies in that country, while at the same time warning on the fragile peace and the precarious economy.

CalPERS, the US’s largest public pension fund with about $236 billion in market assets, now owns stock in only eight companies in Sudan and Iran, down from 47 companies five years ago. The amount invested has, accordingly, fallen from $2 billion to $160 million.

This sell-off has been in line with California’s divestment Acts, with Rob Feckner, CalPERS’ board president, saying the fund also would not make any new investments in the countries.

“The cost of continuing to hold the stock of these eight companies is greater than the value of divesting them,” he said.

Strong sanctions adopted last year by the US federal government, the UN and the EU prompted the withdrawal of several large multinational oil and energy companies from Sudan and Iran.

The 12 signatories, including CalPERS, to the Sudan Engagement Group (SEG) statement diplomatically urged oil companies such as CNPC/PetroChina, Sinopec, ONGC, and Petronas to do more “to address risks and opportunities associated with operating in Sudan”.

The statement congratulated companies such as Schlumberger, Total and Petrofac for their “balanced focus on economic purpose and social development in the region that, in the long run, should lead to greater benefits for all concerned”.

Shareowners could be a force for peace, said Doug Pearce, CEO/CIO of the British Columbia Investment Management Corporation (BC IMC), one of the members of the Sudan Engagement Group and a signatory to the statement.

“Shareowners can be instrumental in using our investment capital to be a positive force for human rights, community development and economic growth in Sudan,” he said.

The SEG statement was signed by 12 investors with $2.7 trillion in assets under management: APG, Aviva Investors, BCIMC, CalPERS, Hermes Equity Ownership Services, Local Authority Pension Fund Forum, Mn Services, New Zealand Superannuation Fund, PGGM Investments, Robeco, The Co-operative Asset Management, and Universities Superannuation Scheme.