Goldman Sachs’ GQG fund cuts exposure to Russia to $222 million

A view of the Goldman Sachs booth on the floor of the New York Stock Exchange
A view of the Goldman Sachs booth on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermid/File Photo

March 4, 2022

By Davide Barbuscia

NEW YORK (Reuters) – Goldman Sachs Asset Management has reduced Russia’s exposure to its international equity fund GQG to about $222 million, down from more than $1.7 billion six months ago, according to a statement and a spokesman.

Goldman Sachs GQG Partners International Opportunities Fund had 0.99% exposure to Russia at the end of February, Goldman Sachs said in a statement on its website, with holdings in Lukoil, Rosneft and Gazprom.

The fund is Goldman’s only fund with exposure to Russia, ranked among the top 100 largest open-ended and exchange-traded funds in the world by estimated US dollar exposure to Russian securities, according to data from research firm Morningstar.

“As we entered 2022, we saw attractive growth opportunities and valuations for many Russian companies,” the company said.

“Russian government actions this year began to outweigh the positive fundamentals we were seeing in many companies. We have reduced our exposure to Russian holdings since early January and they are now focused on the energy sector,” it said.

A spokesman said the fund had assets of $22.45 billion at the end of February, with exposure to Russia equaling $222.3 million.

That’s down from more than $1.7 billion in commitments in September, according to Morningstar data.

Western sanctions against Moscow after Russia invaded Ukraine last week have prompted a wave of investors to announce they are shedding their positions in Russia.

Goldman said it also downgraded the value of its Russian assets after the country’s central bank closed the local market to all foreign investors, hampering plans to divest or value assets.

“Under these circumstances, the Russian securities in the portfolios for which we set valuations are now ‘fairly valued’ in the absence of true market values,” it said.

The fair value determination “resulted in significant discounts to market values ​​that existed prior to the actions of the Central Bank of Russia,” she added.

(Reporting by Davide Barbuscia; Editing by Richard Pullin) Goldman Sachs’ GQG fund cuts exposure to Russia to $222 million

Caroline Bleakley

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