Colorado State Treasurer Mike Coffman cited the
risk to the Public Employee Retirement Association (PERA)
of putting money into those companies that could face
substantial harm in the wake of international sanctions or
even military strikes. That harm could severely impact the
value of stocks and bonds in the pension fund’s portfolio,
“Pension funds across America should be looking at this issue because whether investing in stocks, bonds or venture capital, we must deal with this new type of investment risk,” Coffman told Washington-based publisher BNA.
Coffman said companies with business ventures in countries such as Iran, Iraq, and North Korea that are alleged to support terrorist activities could also face significant losses due to negative publicity or divestment campaigns.
In a recent letter to the PERA board, Coffman recommended that the organization hire a private company to figure out which of PERA’s holdings face terrorism-related risks that could be hurt by an anti-terrorism backlash. A Coffman spokesman said such a consultant would cost $10,000 to $15,000.
“I believe PERA must identify ways to conduct the due
diligence needed to take these risks into consideration
when it is making investment decisions,” Coffman said. “We
cannot afford to take a wait-and-see approach.”
Katie Kaufmanis, spokeswoman for PERA, told BNA that nearly 14% of the association’s $25 billion stock portfolio is in foreign investments. She said she did not know what percentage of the portfolio is invested in companies that could have exposure to terrorist-related activities.