Domestic Bonds

Montana withdrew $14 million in investments tied to Russian interests – Daily Montanan

The state of Montana has sold nearly all of its assets tied to Russian interests, some $14 million, Board of Investments executive director Dan Villa told lawmakers this week.

In March, Governor Greg Gianforte called for Montana to divest itself of assets in Russia after the invasion of Ukraine. Now there is only $35,000 left in Russia due to government ruble restrictions, Villa said.

“We started to exit Russian holdings when we could, not for what I would call governance or political reasons, but because Russia cannot invest as a country at this point,” he said. Villa. “It has been removed from the indexes.”

He offered the update Thursday to the Interim Committee on State Administration and Veterans Affairs in response to a question from Rep. Kelly Kortum, D-Bozeman. In a call after the meeting, Kortum said he asked about the May divestment and Villa said progress was slow, but Kortum did not receive any numbers at the time.

“When I heard the numbers (Thursday) I was pretty thrilled,” Kortum said.

In March, many state governments and industry leaders in the United States announced their intention to withdraw investment from Russia shortly after President Vladimir Putin’s invasion of Ukraine, but not all of them have not succeeded. For example, California lawmakers tried to pull pension funds out of Russia, but Sacramento reported bee At the end of last month, pensions were hard to sell, all those Russian holdings had remained and values ​​had fallen.

In a March 2 memo, the Republican governor of Montana formally asked state agencies to withdraw any investment helping Russia invade Ukraine and its “vicious war machine.” The memo noted that the state had identified some $15 million tied to Russia and had already begun to divest: “Montana stands with Ukraine.”

In other updates from the committee Thursday, Villa also noted that the state has been able to expand opportunities for local governments to use the bonds. He said the change came after a few years of working to remove private activity restrictions on tax-exempt bonds, and he gave an example of the result.

“Previously, we couldn’t have helped local governments or school districts build housing, but at our last council meeting, we are now funding the construction of teachers’ houses in West Yellowstone,” Villa said.

He noted that returns were down in fiscal 2022 for three of the state’s four investment pools, but he also noted that markets were generally down, with the S&P 500 down 12, 39% the same year. At the same time, Villa said the state’s diversification strategy is helping reduce losses.

“It really explains why diversification is needed in a pool of this size,” Villa said. “Some people may be interested in more or less exposure to equities, but when you get around 23%, almost 24% return on your real estate portfolio, it helps smooth out some of your losses that will inevitably occur in cycles. up and down within the national and international stock markets.