NEI urges corporations with economic interests in Russia to suspend or end their operations there
Two weeks after it declared war on Ukraine, Russia is starting to see major firms pull out of the country’s domains as the world continues to condemn the attacks. A large number of Canadian investment companies have taken a stand – and NEI Investments has officially thrown its support behind the movement.
NEI has announced that it is acting on behalf of its investors and in accordance with international standards. By suspending new purchases of Russian securities and initiating a divestment process for existing holdings, as well as applying pressure through corporate engagement, NEI joins others in sending a clear message: responsible investors will not tolerate such flagrant violations of international law, and is committed to using all available tools to put an end to what it described as “deplorable behavior.”
"We condemn the invasion of Ukraine by the Russian military in the strongest possible terms," Bill Packham, President and Chief Executive Officer of Aviso Wealth and NEI Investments, declared. "It is imperative, in the interest of investors who also abhor this attack, that we take clear measures that demonstrate we will not tolerate investments in countries whose governments display such a blatant disregard for international law and human rights.
John Bai, Senior Vice President and Chief Investment Officer of Aviso Wealth and NEI Investments, seconded the comment by adding, "Responsible investors everywhere have been called to action. Our decision to suspend new purchases and divest existing holdings was not taken lightly, but there is no question it is the right thing to do. With this action, we strongly believe we are delivering on our purpose of helping investors achieve their financial goals and empowering them to make a positive difference in the world."
Because sub-advisors had already begun to cut or remove their holdings prior to the invasion, NEI's exposure to Russian securities across its funds is insignificant. NEI Emerging Markets Fund had zero exposure to Russian sovereign debt or currency as of March 3, 2022, and less than 1% exposure (three stock holdings) worth $3.55 million.
Furthermore, NEI has had a long-standing position against war and weapons by excluding companies that derive revenue from military contracts that violate International Humanitarian Law, as well as companies that derive revenue from nuclear weapons contracts, as well as the manufacture of legal weapons systems and components for these systems, for specific mandates.
In solidarity with Ukraine, the ESG Services Team and the NEI Investment Team have agreed to impose an immediate prohibition on the purchase of any new Russian government debt, bonds, or equity issued by Russian-owned businesses. It’s also directing sub-advisors to divest any existing Russian equities as soon as feasible, knowing that present capital market trading limitations make setting a time frame for completing the transaction exceedingly difficult.
Lastly, it is working to influence corporations that operate in Russia or have other economic interests there to publicly align with international attempts to increase economic pressure on Russia, such as by delaying or ceasing their presence in the country, through corporate engagement.
NEI said it has adopted a measured and careful approach to the issue as it affects its assets, its position as a leading responsible investment manager, and, most importantly, its responsibility to investors.