Nadya Wells, a non-executive director for Barings Emerging EMEA Opportunities trust, has resigned as an independent director of the supervisory board of Sberbank of Russia, with effect from yesterday (24 February).
The £100.4m trust, which is sitting on a 14.6% discount, holds Sberbank as its third largest company, making up 5.2% of the portfolio, according to the latest factsheet.
Sberbank, the most actively traded Russian stock on the London Stock Exchange, plummeted 73% on Thursday following news that Putin launched a full-scale invasion of Ukraine.
The bank will likely be subject to the new sanctions as the West looks to inflict more pain on the Russian economy. Sberbank accounts for 32.6% of Russia's total bank assets.
Sanctions against Sberbank, where one in two Russians have an account, would be particularly painful because of its role in paying salaries and pensions, Maria Shagina, a visiting senior research fellow at the Finnish Institute of International Affairs told the Financial Times.
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The Barings trust has the second highest exposure to Russia in the Association of Investment Companies universe with 27.9% allocated. It sits behind the JP Morgan Russian Securities trust, which unsurprisingly has 98.8% in the nation.
In an update yesterday morning, Matthias Siller, one of the fund managers of the trust, said: "The local exchange in Russia has been temporarily suspended, but is expected to reopen today although, is expected to remain extremely volatile, and with heavy losses.
"The escalation of the conflict, is likely to place pressure on risky assets globally, not just Russia and Europe, but globally, whilst placing extra burden on consumers as inflation rises driven by higher commodity prices. Currently oil is trading above $100 a barrel, its highest level since 2004."
He added that in the current environment "will create entry opportunities in companies with good franchises, better balance sheets and improving ESG characteristics".
