Tag: Minnesota State Board of Investment

Minnesota Pension Declines to Dump Israeli Bonds In Face of Protests

Israel

Minnesota and its retirement system hold about $10 million worth of Israeli bonds.

Those bonds have been the focus of public scrutiny recently, as one advocacy group has accused the System of taking sides in the Israel-Palestine dispute.

The group, called the Break the Bonds Campaign, has been attending recent meetings of the State Board of Investment and calling for divestment, according to the Associated Press.

On Wednesday, the Board voted on the issue – and decided 3-1 to keep the holdings intact and allow future purchases of the bonds.

Reaction from state officials who talked to AP:

“We do not make investments based on international policy. That is not our job. It’s not our role,” [State Auditor Rebecca] Otto said. “Although there are horrible things happening in the world, SBI is not the place to solve them.”

[…]

“This is obviously a very public and a very hypersensitive issue with strong feelings on both sides here and elsewhere,” Gov. Mark Dayton said as he presented the resolution, defending it as providing needed guidance to those in charge of Minnesota’s $80 billion portfolio. “I don’t think it is appropriate for us as a board to duck this decision and foist it onto the professional staff.”

Minnesota has been buying Israeli bonds since 1993, a decision Dayton helped steer while state auditor and still considers steady and reliable investments.

State chief investment officer Mansco Perry said the current 10-year bond due to mature this summer has a 2.4 percent yield compared to the 1.5 percent benchmark for treasury bills.

The Minnesota State Board of Investment manages $80.3 billion in assets, most of which are pension assets.

 

Photo credit: “Emblem of Israel” by Original design by Max and Gabriel Shamir; Tonyjeff, based on national symbol. – symbol created in 1948.. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Emblem_of_Israel.svg#mediaviewer/File:Emblem_of_Israel.svg

Minnesota Retirement Board Won’t Support Corporate Inversion of Medtronic

voting

The Minnesota State Board of Investment, the entity that manages assets for the state’s retirement systems, decided on Friday that it will not vote in favor of Medtronic’s acquisition Covidien.

Medtronic is Minnesota’s largest medical technology company, and Covidien is a medical supplier based in Dublin.

The retirement board has a say in the decision because it is a shareholder in both companies.

More from the Star-Tribune:

A four-member subcommittee of the state Board of Investment decided Friday morning not to vote in favor of Medtronic’s acquisition of Dublin-based healthcare supplier Covidien during shareholder voting next week. Critics on the committee said they were concerned that the stock-and-cash transaction would help Fridley-based Medtronic avoid taxes while providing “preferential” tax perks to executives.

Medtronic and Covidien shareholders will vote Tuesday on whether to approve the deal. The state retirement board can participate because it controls 117,130 Medtronic shares and 427,825 Covidien shares through its various retirement and trust funds. Board rules say its staff needs committee approval before casting proxy votes in controversial cases.

The Medtronic deal has proved controversial because it is structured as a corporate inversion that will move the combined company’s legal address being in Ireland, while leaving “operational” headquarters in Minnesota. Such deals have been criticized for helping multinational companies avoid domestic taxes.

Medtronic management is also urging shareholders to support the company paying an estimated $73 million to cover special excise taxes on executive stock options that will come due as part of the inversion. Board members said there was clear precedent to vote against deals that contain an executive “golden parachute.”

The Minnesota State Board of Investment manages $78.2 billion in assets.

 

Photo by Keith Ivey via Flickr CC License