The Chancellor has said UK companies should think very carefully when it comes to investments that would support Putin’s regime in Russia.
In a statement released yesterday (March 13), Rishi Sunak said he welcomes comments already made by a number of companies, such as Aviva, M&G and Vanguard, who have announced their intention to reduce or sell holdings in Russia in the past few days.
“I am urging firms to think very carefully about their investments in Russia and how they may aid the Putin regime – and I am also clear that there is no case for new investment in Russia,” he said.
“We must collectively go further in our mission to inflict maximum economic pain - and to stop further bloodshed.”
His comments come as global sanctions on Putin’s regime are effectively freezing Russia out of global markets in retaliation for his invasion of Ukraine.
Some Russian banks have been blocked from using the Swift payments network, and the Russian central bank has banned overseas institutions from selling local securities on the Moscow Exchange, which has been closed since February 25.
Swathes of emerging Europe funds have already closed after Putin invaded Ukraine, including Blackrock's Emerging Europe Fund, and Jupiter's Emerging European Opportunities Fund.
A number of the UK’s most prominent pension schemes have also dialled down their exposure to Russia in recent weeks.
The Transport for London Pension Fund, the Church of England Pension Fund, and the Universities Superannuation Scheme have all announced investment changes in response to the crisis.
Meeting with managers
The Chancellor and economic secretary John Glen last week met with asset managers and owners to discuss UK investment in Russia.
The Treasury said the pair welcomed the “consensus” on the need to isolate Putin economically.
“The Chancellor’s call is part of the government’s strategy to hold Putin to account and to send a clear message that the invasion will come at a huge economic cost to Russia," the statement said.
It added that the government recognises that for some firms winding down their positions is a long-term process, given market conditions and the ability to sell assets due to sanctions on Russia.