Residents’ Association councillors have received several enquires regarding whether Havering Council has any investments connected to Russia. Cllr Gillian Ford, the Havering Residents Association (H.R.A) chairman, asked for information from Havering’s Chief Executive and received the following reply –

Dear Councillor Ford,

The Chief Executive has passed your enquiry on to me and has asked me to reply directly to you.

I can confirm that we have no treasury instruments linked to Russia, and in relation to the Pension Fund, I can similarly confirm that the Council has no direct holdings. However, some of our investments are in funds, where there is some exposure. In total, the Council’s exposure is approximately, £3.8m. This equates to 0.4% of the total Havering assets. Based on a valuation of £948m.

To minimise investment risk, the Council does not invest directly instead we invest in pooled funds. These are a composite set of investment run by a fund manager on behalf of all investors in that specific fund. Each fund has a specific characteristic that differentiates it such as Emerging markets where the greatest returns may be made, or investments aligned to the Paris Climate Agreement. So whilst there is no specific decision to invest in Russian companies, their inclusion in an index does meant that there is some indirect holding.

We currently have investment in five funds that have exposure to Russian assets. Generally speaking there seems little scope to divest from those holdings at the moment as we would need to sell the whole investment of which the Russian weighting is marginal in value – moreover there is probably not much of a market for those underlying investments and being a forced seller would command a huge discount.

However when events happen that call in to question the ethical nature of our investments we do raise this with the Fund Managers. In this instance there is also the issue of the economic sanctions that are already having an effect. Ironically this means that they cannot immediately divest of their investments as the Russian Stock Exchange however the fund managers assure us that they will be adhering to sanctions and I assume that this will mean that they will divest of the interests as soon as possible due to the sanctions, and in line with commercial considerations.