Denmark’s AkademikerPension has placed Russia in investment quarantine, suspending all investments in government bonds and state-owned companies.

The pension fund said it has received many inquiries about how it will respond to the invasion of Ukraine and its formal recognition of two separatist states.

"Putin's formal recognition of the two separatist republics is a violation of Ukraine's sovereignty, which is a violation of international law. And it is also a breach of our policy on responsible investment,” AkademikerPension director, Jens Munch Holst, explained.

As a result of the quarantine, the pension fund will not make new investments in Russian government bonds or in companies where the state owns more than 50 per cent of the company.

For now, the decision is a quarantine, which can last for a maximum of six months. However, the fund can decide to exclude a company leading to divestment of current investments. The fund has Russian government securities and shares in state-controlled companies totalling DKK 373m – corresponding to 0.3 per cent of its portfolio.

“Before we decide to exclude a country, we first make sure that overall we maintain a high degree of risk diversification, so that we continue to take good care of the members' invested funds. It may then require other adjustments in our portfolio – for example by including another country again precisely to ensure that we stay within our ‘risk budget’.”

If the fund does exclude Russia, the money from the divestment will, in principle, be reinvested in other emerging market bonds in our portfolio

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