USS has ‘materially’ reduced exposure to Israeli stocks and debt following pressure from members
Britain’s biggest private-sector pension fund has sold £80mn of Israeli assets, joining a wave of global retirement funds retreating from the conflict-ridden region following public pressure.
The £79bn Universities Superannuation Scheme (USS), which has more than 500,000 members, has “materially” reduced its exposure to Israeli investments including government debt and Israeli currency in the past six months, said two people with knowledge of the matter. USS started selling down the bond and currency portfolio in March, the people said.
USS declined to comment.
The move followed sustained pressure from the pension fund’s members, concerned over Israel’s human rights record in occupied Palestinian territories since the start of the war with Hamas last year.
USS’s members are largely higher education sector workers, including lecturers at prestigious universities such as Oxford and Cambridge.
In its latest annual report, published last month, USS said it had a “legal duty to invest in the best financial interests of our members and beneficiaries”.
At the time, it said it had reduced its exposure to the Middle East “in response to the financial risks that became apparent”. In the past, the pension fund has also stepped back from investing in tobacco, manufacturing and thermal coal mining.
The war began last October when Hamas carried out a cross-border raid that Israeli authorities said killed 1,200 people inside Israel. The Jewish state’s ensuing offensive in Gaza has killed almost 40,000 people, according to health authorities in the strip.
The University and College Union (UCU), which represents USS members, said it had raised concerns with the pension fund about it investing in companies on the UN watchlist of those in breach of international law.
“We welcome what they have done by disposing of Israeli government bonds and currency, but we want them to go further and divest the companies that are supporting the Israeli government in its conflict in Gaza,” said Dooley Harte, a UCU official.
The USS’s move follows similar action by other major global retirement funds that have pulled back their Israel exposure following pressure from members.
In June, KLP, Norway’s largest private pension manager said it had divested its stake of close to $70mn in US industrial group Caterpillar, owing to the risk that its equipment was being used to violate human rights of Palestinians.
Pension Denmark, one of the biggest pension funds in Denmark with more than 800,000 members, has also withdrawn all its investments from Israeli banks.
In the UK, public sector pension plans with cash tied up in groups supplying weapons to Israel are under pressure to dump their holdings.
However, the conflict has also presented opportunities for some investors to scoop up assets in the conflict-ridden Middle East region.
In May, the Financial Times reported that local municipal councils in the US were among the most enthusiastic recent buyers of Israeli bonds. Israel Bonds, the official underwriter for the debt, said at the time that, since the start of the war on October 7 last year, it had sold more than $3bn of the debt worldwide, three times the annual average.
