Mississippi has tapped Baillie Gifford, Lazard Asset Management, and Northern Trust as three of the seven firms tasked with managing the international equities held in its public pension fund. The three firms collectively manage a dozen different equity portfolios that are exposed to Chinese battery manufacturer Contemporary Amperex Technology Limited, according to research conducted by the business intelligence firm Avasta and obtained by the Washington Examiner. In January, the Department of Defense designated CATL as a “Chinese military company,” indicating its belief that the manufacturer is either controlled by or a collaborator with the Chinese military.

Baillie Gifford, Lazard Asset Management, and Northern Trust’s comfort with investing in a corporation linked to the Chinese military could indicate how they’re managing funds in Mississippi. While some states, including Mississippi, have backed calls to divest public pensions from China, the southern state’s most recent asset disclosures cast some doubt over its commitment to doing so. 

Mississippi’s state pension fund holds a $73.7 million stake in the Chinese tech conglomerate Tencent. In January, the Pentagon designated Tencent a Chinese military company, showing that Mississippi’s state pension fund doesn’t categorically reject investments linked to the Chinese military. Tencent has been implicated in the Chinese Communist Party’s censorship efforts and has reportedly provided the Chinese government with information leading to the arrests of religious and political dissidents.

“Tencent’s stock lost more than ten cents on the dollar last week after the U.S. Department of Defense blacklisted it for working with China’s military, costing China’s largest public company $60 billion of market value,” State Armor chairman and CEO Michael Lucci wrote in January. “Unfortunately, state and local pensions across the country also took a hit due to their broad exposure to Chinese companies like Tencent … State pension managers are making it harder for America’s national security community to do their job by laying state pensions on the financial tracks ahead of the federal sanctions train.”

Connecticut’s situation is similar to Mississippi’s. The state has tapped Schroders Investments, Driehaus Capital Management, and State Street Global Advisors to help manage its foreign assets. All three firms also manage funds that include CATL holdings, per Avasta. 

CATL recently held a controversial Hong Kong initial public offering. Bank of America and J.P. Morgan underwrote the offering while the major U.S. law firm Kirkland & Ellis provided legal consulting related to it. American businesses assisting what the Pentagon has dubbed an arm of the Chinese military in raising capital sparked an outcry from some policymakers. House Select Committee on the CCP chairman Rep. John Moolenaar (R-MI), for example, called on the banks to drop their deal with CATL.

“If J.P. Morgan and Bank of America proceed with this IPO, they risk complicity in underwriting genocide, undermining American industry, and endangering U.S. service members,” Moolenaar said in a statement. The congressman’s comment alludes to allegations that CATL sources goods from forced Uyghur labor, a claim the battery manufacturer denies.

CATL’s IPO also raised questions surrounding its aggressive patent submission practices, with some of its employees recording astronomical volumes of inventions. One inventor was listed on almost 1,400 patents granted in 2023, which would require nearly four inventions per day.

Sources told the Washington Examiner that the U.S. Patent and Trademark Office is interested in finding ways to deny CATL and other Pentagon-designated Chinese military companies from accessing the office’s expedited patent proceedings, citing conversations with agency staff.

MUSK AND MAJOR BANKS ENTANGLED WITH CHINESE BATTERY MANUFACTURER UNDER SCRUTINY FROM FEDS

Mississippi and Connecticut are far from the only states with public pension funds exposed to Chinese corporations linked to the People’s Liberation Army. State-run pension funds in New York, California, Illinois, and others all have holdings in corporations linked to the Chinese military. 

The Mississippi and Connecticut Treasurer’s offices did not respond to requests for comment.