Russia/Ukraine statement

The Russian invasion of Ukraine is clearly a humanitarian tragedy. It will also have widespread economic consequences. We have been working with our advisers to try to make an early assessment of the likely impacts on the Fund.

Russia/ Ukraine

The Russian invasion of Ukraine is clearly a humanitarian tragedy.

It will also have widespread economic consequences.

We have been working with our advisers to try to make an early assessment of the likely impacts on the Fund.

Initial conclusions are:

• Global equity markets have already fallen, and while they have partially recovered, they remain volatile.
• From a macro-economic perspective, higher medium term European, oil, gas and food prices alongside financial market disruption and sanctions on Russia are likely to lead to an increase in already elevated inflationary pressures, which will in turn weaken the outlook for economic growth. 
• A period of prolonged instability, with impacts for Europe in particular, is now clearly a potential outcome. 
• The situation is uncertain, and changing rapidly, but this could negatively affect asset prices right across SBCPF portfolios

Stock specific exposure

SBCPF owns shares in 2 Russian companies within one of its global equity portfolios.  These holdings have reduced over recent months as a result of sales activity and market movements and as at close on 14^th March have been fully written down to zero.

SBCPF also holds investments within a pooled alternatives fund.  The funds held are within emerging market bonds and private equity. The value of these investment represents 0.24% invested within the pooled fund.

The total investment currently invested in Russia represents less than 0.01% of the overall Fund.  With the closure of the Russian Stock market and the illiquid nature of some of the investments managers are unable to disinvest these funds.

Underlying exposure

The Fund invests globally across a range of asset classes and investment markets.  This diversification spreads risk, but it also creates a complex network of commercial and economic exposures which will all be affected by these events to a greater or lesser extent.  SBCPF is liaising with its investment managers as they assess the impact of macroeconomic pressures as well as potential wider ramifications and outcomes on companies and assets within the Fund's portfolios.

Pensions

None of this will have any impact on our ability to pay pensions. It might reduce investment returns for a period, but SBCPF is a long-term investor and remains well funded.