Britain’s largest private-sector pension fund, the £79 billion Universities Superannuation Scheme (USS), has divested £80 million from Israeli assets. This move is part of a broader trend among global retirement funds retreating from the conflict-ridden region following mounting public pressure.
The USS, which serves over 500,000 members, has significantly reduced its investments in Israeli government debt and currency over the past six months. This decision follows a sustained campaign by its members, who have expressed concerns over Israel’s human rights record in the occupied Palestinian territories since the onset of the conflict with Hamas last year. The USS began this divestment process in March.
USS declined to provide a comment on the matter. In its most recent annual report, published last month, the pension fund stated that it has a “legal duty to invest in the best financial interests of our members and beneficiaries.” The report also noted that the fund had previously cut its Middle Eastern investments due to emerging financial risks. Historically, USS has also reduced its investments in industries such as tobacco, manufacturing, and thermal coal mining.
The ongoing conflict began in October when Hamas conducted a cross-border raid, leading to significant casualties. The subsequent Israeli offensive in Gaza has resulted in nearly 40,000 deaths, according to health authorities in the region.
The University and College Union (UCU), representing USS members, welcomed the fund’s decision to divest from Israeli government bonds and currency. However, UCU official Dooley Harte called for further action, urging the pension fund to divest from companies supporting the Israeli government’s actions in Gaza.
USS’s divestment aligns with similar actions by other major global retirement funds. In June, Norway’s largest private pension manager, KLP, withdrew its $70 million investment in US industrial group Caterpillar due to concerns that its equipment might be used to violate Palestinians’ human rights. Pension Denmark, a significant Danish pension fund with over 800,000 members, also exited its investments in Israeli banks.
In contrast, some investors view the conflict as an opportunity. The Financial Times reported in May that local municipal councils in the US have been among the most active buyers of Israeli bonds. Israel Bonds, the official issuer of the debt, announced that it had sold over $3 billion in bonds worldwide since the conflict began on October 7 last year, three times the annual average.
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