Mar 7, 2022

The Fund has very little direct exposure to Russian investments and will sell these when sanctions allow.

We are all aware of the invasion of Ukraine by Russian military forces, and Railpen joins the many in the global community who are deeply concerned for all involved in the conflict and call for a peaceful resolution.

War is horrendous in its impact on humanity, and it rightly creates debate on the morality of such action. It is also an ongoing global political risk that Railpen considers and prepares for as part of its duty to the schemes, its clients and members. As with many UK organisations and possibly many of you reading this, Railpen has colleagues with family in Ukraine or impacted by these developments in other ways. 

Impact on the schemes and action taken 

Railpen manages a very small number of investments in publicly traded Russian companies and has no investments in any Russian government assets. As of 1 March 2022, these investments totalled approximately £24 million, which is about 0.07% of the total investments we manage on behalf of the railways pensions schemes. 

As you would rightly expect us to, Railpen complies fully with all current sanctions and monitors new sanctions closely as the situation changes very quickly. 

Any decisions we have taken, or will take, will always support our duty to protect the best interests of our members. 

As an immediate step, we froze all trading activity on the small number of investments that are in Russia. Because of the sanctions, we may not be able to sell these now, but we will sell them when we can. We believe this is the right thing to do at this time, and we will continue to review this position in the future. 

Market conditions and monitoring 

As we all know, this terrible situation is evolving quickly. While some effects on the financial markets are already being felt, such as increasing energy costs, the long-term implications are still unclear. However, the schemes' investments are global and appropriately diversified to minimise risk.

This means we invest in many different countries, companies and other investments. In other words, we do not put all the eggs in one basket. Diversifying like that means the investments are more resilient to financial market shocks, as recently evidenced during the Covid pandemic and before that, the market crash in 2008.

That is not to say we are complacent. We continue to monitor all aspects of this situation as it evolves.

Cyber threats

Cyber security remains a constant priority for Railpen. Cyber threats increased a lot in the build-up to and since the start of the conflict. Our Technology Security teams use our best solutions to monitor and prevent threats. We have worked hard to strengthen our processes and security measures further, remaining vigilant to possible new threats and responding quickly in how we tackle them. To date we have not experienced any breach in our systems.

Keeping you informed

Should conditions change significantly, or new information comes to light that requires Railpen to react, we will update you as soon as possible. 

In the meantime, we will continue to work in the best interests of our members and hope for a peaceful end to the suffering of those involved.