State of CT Israel's "Exposure"
June 8, 2015 Reply from Deputy Treasurer Shaw

Question 1: "Of the $13 million in bonds that are not Israel State Aid debentures are these all bonds in private companies or are some other kinds of bonds issued by the State of Israel?"

Response: As of May 26, 2015, the CRPTF's Core Fixed Income Fund held $15.8 million of sovereign bonds issued by the State of Israel. There were no Israeli public or private corporate bonds in this Fund.

Question 2. "Were the purchases of bonds of the state of Israel business decisions or were they wholly or in some part acts of solidarity or charity with the state of Israel?"

Response: Investment decisions are made within the construct of an Investment Policy Statement ("IPS"), as required by State law (section 3-13b of the Connecticut General Statutes). (The full text of the IPS may be accessed here: The IPS sets forth the general standards that govern all investments, and are established by the State Treasurer and approved by the State's independent Investment Advisory Council.

The CRPTF's Core Fixed Income Fund is managed by external investment firms with a mandate to invest the portfolios in line with the Barclays Capital Aggregate Index ("Barclays Index"). The investment objective of this Fund is to outperform the Barclays Index over market cycles, while closely tracking the characteristics of this index. This index includes Israeli government bonds. Connecticut's investment managers have discretion to select individual issues which they believe offer value and provide portfolio diversification within the constraints of our investment guidelines.

Question 3. "Who decides whether to invest or to sell off an investment? Is there a committee in your department that makes recommendations to the Treasurer? Is it one person? Is it the Treasurer herself? Is it possible for members of the public to meet with the decision makers about these investments?"

Response: The Treasurer, as principal fiduciary of the CRPTF, is responsible for the investment and custody of CRPTF assets. To carry out these responsibilities, the Treasurer retains money managers, investment partners, a custodian bank, investment consultants, and other service providers, as well as in-house investment professionals, to assist in the management of these assets. In addition, the Treasurer may invest directly with companies, limited partnerships and other investment vehicles. All decisions involving the hiring of providers of investment services or direct investments are subject to the review of the Investment Advisory Council.

Contracts for the management of CRPTF assets follow a public, competitive search process endorsed by the Investment Advisory Council, and can be executed only after the Council has exercised its right to 45 days for review and comment on the Treasurer's recommendation.

As for decisions to buy or sell a specific investment, discretion is delegated to external managers within the guidelines set forth in the IPS and governing contract.

Should members of the public seek input on this process, the Investment Policy Statement details the public notice provisions for amendments to the IPS.

Question 4. "Can we get a detailed list of all the investments in Israel? (I understand this may be somewhat fluid, say a snapshot of investment at the end of 2014) While we oppose all investment in Israel at this time, some Israeli companies doing work in military and security and wall and barbed wire construction are particularly odious."

Response: Attached is a list of all CRPTF investments, as of May 26, 2015, with an Israel ISIN (International Securities Identification Number).

Attached .pdf file supplied by Treasurers Office - details of holdings download (pdf))