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The Indiana Public Retirement System is divesting from holdings in Hong Kong worth almost $170 million, more than two years after lawmakers banned investments in Chinese interests.
Divestment from public equity assets should be complete by December, according to materials for INPRS’ Friday board meeting, and the agency is working to update performance benchmarks.
INPRS asset managers have already pulled out of fixed income holdings, per the board book, while benchmarks for those assets had “no exposure” to Hong Kong and didn’t need updates.
The packet says those changes came “following recent clarification” of 2023’s Senate Enrolled Act 268. It mandated divestment from a wide range of Chinese or Chinese-controlled companies and products, and blocked future investments in those entities.
The law, which went into effect in May 2023, directed INPRS to identify all its investments in restricted entities before June 30 that year, plus annually thereafter. The agency is required to complete divestment “as soon as financially prudent,” but is also subject to statutory deadlines.
The law’s timeline stipulates divestment of at least 50% within three years after an investment in a restricted entity is discovered, 75% within four years and 100% within five years.
INPRS celebrated shedding its $1.2 billion worth of investments in Chinese and Chinese-controlled entities last year — four years ahead of that schedule.
But the agency wasn’t counting its holdings in Hong Kong, Indianapolis Star Deputy Opinion Editor Jacob Stewart revealed in a September column. Stewart, who previously worked as a press secretary for the Indiana Senate Republican caucus, argued those investments pose a “clear national security risk.”
INPRS cited Hong Kong’s “separate constitution,” according to Stewart.
The law’s author, Sen. Chris Garten, R-Charlestown, noted that document still calls Hong Kong an “inalienable part” of China. His intent was that the ban apply to Hong Kong, Stewart wrote.
The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.
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