The Obama administration told asset managers last week that it was planning additional sanctions against Russia over the conflict in Ukraine.

Officials from the Treasury Department and the National Security Council met in Washington with mutual-fund and hedge-fund managers, according to a person who attended. Their comments sent a message that more sanctions are on the way and that investors, if they were concerned about the impact, should manage that risk, said the person, who asked not to be identified because the discussions weren’t public.

The meeting, convened a week before talks with Russia in Geneva that ended yesterday, left managers grappling with the question of whether the government intended to follow through, or was trying to trigger asset sales through the threat of sanctions, said the person. Former administration officials have said forcing Russia out of global financial markets is the strongest tool President Barack Obama has at his disposal in trying to defuse the crisis between Russia and Ukraine.

“A lot of firms on the buy side have cut their exposure to Russia,” Jack Deino, the head of emerging-market debt at Atlanta-based Invesco Ltd., said in an interview, talking about the industry in general.

Staff of the National Security Council, which is the president’s main forum for considering national security and foreign policy matters, has reached out to businesses to provide information on sanctions against Russia, said Laura Lucas Magnuson, a spokeswoman for the council.

Ukraine Talks

“As Russia continues to destabilize Ukraine, we are prepared to sanction additional individuals and entities, and we’ve made clear that we’d be prepared to target certain sectors of the Russian economy if we see a significant escalation including direct Russian military intervention in eastern Ukraine,” she said. “We are coordinating our actions closely with our partners in Europe and the G7.”

The four-way talks on the crisis in Ukraine ended with an accord, after Russian President Vladimir Putin said he hopes he won’t have to send in troops. Stocks in Russia and Asia rose. U.S. Secretary of State John Kerry said Russia, which the U.S. and its European allies accuse of stoking the conflict, must start implementing the deal within days or face additional sanctions.

Russian Risk

“If we’re not able to see progress on the immediate efforts, to be able to implement the principles of this agreement this weekend, then we will have no choice but to impose further costs on Russia,” Kerry said at a press conference.

Investors had been selling Russian securities, causing its currency to fall 7.6 percent against the dollar this year. The country’s reaction to the ouster of President Viktor Yanukovych in February -- annexing the Crimea region and amassing troops by the Ukraine border -- has increased the perception of risk attached to investing in Russian sovereign debt.

The cost to protect $10 million of debt through the credit default swap market has risen to $248,000 annually for five years from $166,000 at the end of last year, according to data provider CMA, a unit of McGraw Hill Financial Inc.

An administration official warned this week that if the talks fail, the U.S. is ready to take further steps, targeting people in the Russian president’s inner circle and entities they oversee. Industry-specific sanctions are also an option, according to the official, who spoke about private talks on condition of anonymity.

‘Biggest Weapon’

“The biggest weapon in terms of sanctions would be similar sanctions to what we did in Iran and basically try to exclude Russia from international financial markets,” said William Pomeranz, deputy director of the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson Center in Washington. “The Russians fear that, and that is what the Russians want to avoid.”

The meeting in Washington last week included several mutual-fund companies with large bond units, according to the person. Separately, the U.S. Securities and Exchange Commission has been asking U.S. asset managers about their investments in Russian securities, said the person.

‘Undermine Oligarchs’

An administration official, who asked for anonymity to discuss internal deliberations, said there have been no specific requests made to investors not to invest in Russia. The official said the Department of Commerce and the Treasury do have conversations with the business community to explain what they’re doing, such as briefing executives after a sanctions announcement. The official said the government maintains open lines of communication so businesses understand what policy makers are doing.

Hillary Clinton, a former U.S. secretary of state, said this month that the global economic market is doing its part to rein in Putin.

“The flood of money out of Russia in the last several months has been astonishing, and I hope it continues,” Clinton said April 8 at a conference in San Francisco. “That is the best way to undermine the oligarchs who support him, undermine his own economic interests.”

‘Wake-Up Call’

One bond manager at a large U.S. mutual-fund company, who asked not to be named citing company policy, said the firm has been working to sell Russian debt and wasn’t inclined to return to the market in the near future. The person, who hadn’t heard of any government attempts to influence money managers, said the company perceives risk in Russia as having increased significantly.

“This is a real wake-up call that there are in the former Soviet Union still a lot of moving parts and more risk than meets the eye,” said Deino at Invesco, a mutual-fund manager with $787 billion in assets as of March 31. “This is going to result in a decisive increase in the cost of doing business in Russia, in the risk premium, and that’s not going to go away for years.”

Deino is the lead manager of the Dublin-registered Invesco Emerging Markets Bond Fund, which holds $255 million.

Western Asset Management, the bond investing unit of Legg Mason Inc., has been making “incremental” purchases of Russian assets that are less exposed to sanctions, Robert Abad, who helps oversee about $53 billion of emerging-market debt at Western, said in a telephone interview.

Geneva Accord

“It’s all about the sensitivity of each sector to potential sanctions,” said Abad, who favors telecommunications and mining. “No one is here to gamble. We all have a fiduciary responsibility to asses risk in the most prudent way.”

The Geneva statement called for all illegal armed groups in Ukraine to be disarmed, seized buildings to be returned to their legitimate owners and occupied public places to be vacated. An amnesty will be granted to protesters. A mission from the Organization for Security and Cooperation in Europe will help oversee the measures. A new constitutional process will aim to establish “a broad national dialogue.”

Russia’s Micex Index increased 2.2 percent at 3 p.m. in Moscow, and the Ukrainian Equities Index rose 0.9 percent. The MSCI Asia Pacific Index added 0.3 percent. The yield on Russia’s February 2027 bond slid 18 basis points to 8.99 percent, while the ruble retreated after its biggest gain this month yesterday. Financial markets in the U.S., U.K., Germany, Hong Kong and Australia are among those closed for a holiday.