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March 3, 2022updated 23 Mar 2022 1:04pm

Ukraine crisis: Asset managers freeze $3bn assets linked to Russia

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Asset managers, including BNP Paribas, Pictet, and Amundi, have frozen Russia-linked equity funds with more than $3bn in assets amid the market turmoil following sanctions on Russia, reported Reuters. 

The sanctions, which were announced by the US and its western allies in response to Russia’s ongoing military attack on Ukraine, have triggered a freefall of Russian assets.

Asset manager usually suspends their funds in rare scenarios, including when assets are difficult to value and in order to ensure fair treatment of investors.

At least 22 asset managers have frozen their Russia-focused funds after the Ukraine invasion, according to a report by Financial Times.

French asset manager Amundi suspended three equity funds with exposure to eastern Europe, while DWS and HSBC suspended Russia exchange-traded funds that track an index, according to a Reuters report.

Earlier this week, Swiss private bank Pictet suspended its Russian equities fund after sanctions were imposed on Russia.

The bank informed its shareholders that it is freezing the fund ‘in light of the current and ever-evolving circumstances associated with Ukraine/Russia situation, the current political situation, and liquidity constraints’.

It also said that it would enable the fund ‘as soon as the market conditions allow’.

Paris-headquartered BNP Paribas said it was not determining a valuation for its Russia fund while the Moscow exchange was closed.

JPMorgan announced that its London-listed Russian securities investment trust would not be able to pay dividends owing to sanctions and Russia’s restrictions.

Liontrust, another British asset manager, suspended dealing in its Russia fund in a bid to restrict investors from making purchases or redemptions in the fund until further notice

Barings’ Moscow stocks in its emerging EMEA opportunities investment trust were valued at zero, according to the report.

Swedish fund managers Swedbank, East Capital, Carnegie, and Handelsbanken also suspended their respective Russia-linked funds, while Sweden’s Pension Agency halted buy orders in four Russian funds on its pension fund marketplace platform.

Nordea decided to exclude all Russian investments from its funds, including government bonds, equities and bonds.

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