UK's largest private pension fund divests £80m from Israeli assets

The UK’s largest private-sector pension fund, the Universities Superannuation Scheme (USS), has divested £80 million from Israeli assets, joining a global trend of retirement funds pulling out of the region amid public pressure.

According to the Financial Times, the £79 billion fund, which serves over 500,000 members, has significantly reduced its investments in Israeli government bonds and currency over the past six months. The decision came after persistent pressure from members concerned about Israel’s human rights record in the occupied Palestinian territories following the start of the war with Hamas last year. The USS has previously divested from industries such as tobacco and thermal coal mining due to financial risks.

Members of the USS are predominantly professionals in the higher education sector, including faculty at renowned institutions like Oxford and Cambridge Universities.

In its most recent annual report, released last month, USS emphasised its “legal duty to invest in the best financial interests of our members and beneficiaries.” The report also noted that the fund had decreased its investments in the Middle East due to emerging financial risks.

Moreover, the University and College Union (UCU), which represents USS members, stated that it had previously expressed concerns to the pension fund regarding investments in companies listed by the UN as violators of international law. “We welcome what they have done by disposing of Israeli government bonds and currency, but we want them to go further and divest the companies that are supporting the Israeli government in its conflict in Gaza,” said Dooley Harte, a UCU representative.

The USS decision to reduce its investments in Israel follows actions taken by other major global pension funds, responding to member-driven pressure. In June, Norway’s largest private pension manager, KLP, announced the sale of nearly $70m in shares of US industrial giant Caterpillar, citing concerns that its equipment was being used to infringe on Palestinian human rights. Similarly, Pension Denmark, one of Denmark’s largest pension funds with over 800,000 members, has fully divested from Israeli banks.

In the UK, public sector pension funds are also facing mounting pressure to divest from companies supplying arms to Israel.

Despite these divestments, the ongoing conflict has created investment opportunities for others. In May, the Financial Times reported that some US local municipal councils have become avid buyers of Israeli bonds. According to Israel Bonds, the official debt underwriter, more than $3bn in Israeli bonds have been sold globally since the war began on 7 October, triple the usual annual sales.

READ: Netanyahu ‘most cunning, most ruthless leader’: Veteran diplomat