
Indiana Public Retirement System moves to eliminate Hong Kong exposure after updated interpretation of China investment prohibition
The Indiana Public Retirement System (INPRS) plans to fully divest approximately US$170 million of its holdings in Hong Kong by December, following a recent clarification of its 2023 legislative mandate to divest from Chinese-controlled entities.
The review comes two years after the state legislature passed Senate Enrolled Act 268, which prohibited investment in companies domiciled in or controlled by the People’s Republic of China.
INPRS has already exited fixed-income holdings tied to Hong Kong and is now working to update its performance benchmarks, as detailed in its board materials released ahead of a meeting Friday.
The benchmark adjustments will reflect that certain assets will have “no exposure” to Hong Kong investments.
The divestment effort builds on the system’s earlier achievement of eliminating its US$1.2 billion exposure to Chinese entities, completed ahead of schedule in mid-2024.
The law established progressive divestment targets: fifty per cent within three years of identifying a restricted investment, seventy-five per cent within four years, and one hundred per cent within five years.
INPRS exceeded the timeline by divesting from China nearly four years ahead of requirement, but had previously not treated holdings linked to Hong Kong under the law’s scope.
That oversight was addressed after the “recent clarification” referenced in the board packet.
Supporters of the legislation, including State Senator Chris Garten (R-Charlestown), point out that Hong Kong remains defined as an “inalienable part” of China under China’s Basic Law, and say the original intent was to cover Hong Kong assets.
Columnist Jacob Stewart raised concerns in September that the pension fund still held millions of dollars in Hong Kong investments despite the Chinese divestment law.
INPRS now says it will complete the remaining divestment by the end of December and has planned to reinvest in other markets in compliance with its strategic asset allocation.
The move signals the fund’s commitment to align with state policy on reducing exposure to China-linked jurisdictions, while managing index and performance benchmarks for affected portfolios.
The review comes two years after the state legislature passed Senate Enrolled Act 268, which prohibited investment in companies domiciled in or controlled by the People’s Republic of China.
INPRS has already exited fixed-income holdings tied to Hong Kong and is now working to update its performance benchmarks, as detailed in its board materials released ahead of a meeting Friday.
The benchmark adjustments will reflect that certain assets will have “no exposure” to Hong Kong investments.
The divestment effort builds on the system’s earlier achievement of eliminating its US$1.2 billion exposure to Chinese entities, completed ahead of schedule in mid-2024.
The law established progressive divestment targets: fifty per cent within three years of identifying a restricted investment, seventy-five per cent within four years, and one hundred per cent within five years.
INPRS exceeded the timeline by divesting from China nearly four years ahead of requirement, but had previously not treated holdings linked to Hong Kong under the law’s scope.
That oversight was addressed after the “recent clarification” referenced in the board packet.
Supporters of the legislation, including State Senator Chris Garten (R-Charlestown), point out that Hong Kong remains defined as an “inalienable part” of China under China’s Basic Law, and say the original intent was to cover Hong Kong assets.
Columnist Jacob Stewart raised concerns in September that the pension fund still held millions of dollars in Hong Kong investments despite the Chinese divestment law.
INPRS now says it will complete the remaining divestment by the end of December and has planned to reinvest in other markets in compliance with its strategic asset allocation.
The move signals the fund’s commitment to align with state policy on reducing exposure to China-linked jurisdictions, while managing index and performance benchmarks for affected portfolios.







































