At World’s Largest Funds, Employee Turnover Varies

Norway’s sovereign wealth fund has cleaned out at the executive level, but others—despite similar losses in 2008—are staying the course on investment management teams.

(September 4, 2009) – Norway’s sovereign wealth fund is making sweeping changes at the top of its management structure, but this move, if anything, simply emphasizes the fact that few large institutions are pursuing major investment personnel alterations.

 


The most prominent recent cuts have been seen at Norway’s Government Pension Fund (Global), which falls under the purvey of the Norges Bank Investment Management. The bank, following large 2008 losses at the $410 billion oil fund, has promoted a new chief investment officer, operating officer, and risk officer. Last year’s losses wiped out 12 years of gains for the fund, considered one of the largest in the world.

 


Corresponding to the management change has been a move into emerging markets, real estate, and other asset classes traditionally considered riskier, according to Bloomberg. While this move has been mirrored by some (Joe Dear, head of California giant CalPERS, has made plans to increase risk premiums going forward to decrease unfunded liabilities), others (such as Massachusetts’ MassPRIM) are moving away from alternatives and riskier asset classes.

 


Norway’s personnel moves are not being mirrored elsewhere on a large scale, however; indeed, there has been a dearth of movement at other such funds seeing large funds with similar losses. Indeed, in some cases—Chip Goodyear at Temasek, for example—managers interested in changing course are being pushed out. America’s endowments—which, like well-publicized cases at Harvard and Yale, faced both large drawdowns and liquidity issues—have largely left top endowment management unchanged. The same can be said for America’s large pension plans, where losses on a scale not seen for a generation have failed to alter the top management at the vast majority of funds.

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