Following the announcement from Quilter Investors last week that it had barred its third-party managers from investing in Russia or Belarus, Investment Week asked other firms that have sub-advised funds about what action they had taken. 

Openwork was the most proactive, instructing its third-party managers to remove its direct exposure to Russian and Ukrainian holdings in mid-February.

A spokesperson from the Openwork Partnership said: "The core focus was to protect our advisers and their clients and this decision has been very well received."

Part of the problem for managers being instructed to reduce exposure to Russia following the invasion is that markets were closed, so managers cannot buy or sell assets.

Russia-Ukraine war spurs increased investor vigilance of where cash allocated

Acknowledging that issue Hargreaves Lansdown said it was "actively engaging with our portfolio managers on this issue, with the aim to reduce the minimal exposure in our portfolios further, as and when they are able to do so".

A spokesperson at St. James's Place said it had also "acted quickly" to instruct external fund managers to stop any further investments into companies listed or located in Russia and Belarus.

"Several fund managers sold or reduced exposure to Russia and Belarus leading up to this event, which meant that we had minimal exposure heading into the crisis," the spokesperson said. "Since it has begun, through a combination of selling activity and declines in market valuations, our exposure to Russian and Belarusian assets has fallen from 0.3% to less than 0.1% of AUM.

"We will continue to engage with our fund managers to continuously monitor their remaining positions in Russia and Belarus, given how rapidly the circumstances are evolving."

Quilter explains decision

At the time of the announcement Stuart Clark, portfolio manager at Quilter Investors, noted that normally they give their third party managers autonomy but given the "seriousness of the situation" they had a responsibility to act. However, commentators have noted that given investors cannot currently buy Russian assets, the move is unnecessary. 

Speaking to Investment Week, Clark said the action was important "from a governance point of view as the ACD".  He noted that firms are "coming to their own conclusions about what is included and what is excluded" and added that some firms are leaving decisions to individual portfolio managers while others have installed, or are looking to install, corporate policies.  "QI is the ACD, that legal investment manager, and we are appointing a supervisor, it was really important that the message came from us that we do not expect those names to be added to in the portfolios," Clark added. "It also does avoid any ambiguity around the fiduciary responsibility."

The portfolio manager added QI has engaged with all the managers about their current Russia exposure. He noted for instance that AllSpring, which used to be Wells Fargo Asset Management, had two small Russian businesses within their portfolio and he was discussing with them what their plan was for those names when markets reopen.

"It would be fair to say that virtually all have indicated at the moment that there is a likelihood those names will be leaving the portfolios," Clarke said. "But it is not 100% of the portfolio managers who have yet come to that conclusion."