UPDATE ON IRAN DIVESTMENT

The State Pension Board (SPB) retained Risk Metrics Group which found that the state’s portfolio of direct investments included 38 companies (listed on back) doing more than $20 million of business annually with Iran’s energy sector. On August 5, 2008 the board sent a letter directly to those companies indicating that they could either clarify their Iran operations (possibly to argue that they weren’t engaged in the proscribed business practices), cease such business within 90 days, or face divestment. Similarly, the SPB also sent letters to five external investment managers informing them of the new law, directing them to sell, redeem, divest, or withdraw all publicly traded securities of the 38 companies no later than July 11, 2009. Though divestment of indirect holdings is not required by the law, the SPB nonetheless did request that its five managers of private market funds either: (a) consider removing the 38 companies from their funds, or; (b) create a similar fund devoid of those companies. Of the five managers, only The Rock Creek Group has acted to address the SPB’s indirect holdings. It has redeemed all or some of its investments in CamCap Energy Onshore Fund LP, Cantillon World LP and Lansdowne UK Equity Fund LP. Rock Creek has agreed to continue to monitor the exposure of underlying managers.

So far a total of $3.3 million has been “direct divested” from 7 companies. (See chart.) Since the law stipulates that all scrutinized companies must be divested from by July 11, 2009 we are anticipating many more millions will be divested over the next few months. JCRC and Government Affairs will continue to closely monitor the implementation of the Iran divestment law and look for appropriate opportunities to use this important development for other Iran-related advocacy goals.

For Summary of Illinois’ Iran Divestment Bill: Company Update see attached chart.

JCRC/Government Affairs Summary of Illinois’ Iran Divestment Bill: Company Update

No Response/ Responded / Divestment Completed scrutiny continues scrutiny continues

Bow Valley Energy Ltd Dagangan Bhd Aker (Yards) AS Aker (Yards) ASA China Chemical $335,459 Inpex Holdings Inc. Cnooc LTD CNPC Hong Kong Ltd. $521,925 Itochu Corp. Linde AG Costain Group PLC $598,050 JGC Corp. YPF SA Daelim Industrial Co. $305,717 OMV AG Spa $564,919 Gas Bhd OAO Sasol Ltd. $1,038,436 Total: GS Holdings Corp. SNC-Lavalin $3,364,506

Indian Oil Corporation Ltd StatoilHydro ASA L’air Liquide Ltd. Oao

Lundin Petroleum AB MISC Berhad

Mitsui Eng & Shipbuilding Co.

Oil & Natural Gas Corp Ltd.

Petrochina Company Limited Petroleo Brasileiro PLC

Samsung Engineering Co. Ltd. Ltd.

Snam Rete Gas

The Weir Group plc