The former CEO of the Alberta Investment Management Corporation (AIMCo) is to join a panel of experts to advise the world’s largest sovereign wealth fund on how to invest in—and make more from—real estate and infrastructure.
The three-strong group will include Leo de Bever, who oversaw significant investment in real assets at AIMCo, Professor Stijn Van Nieuwerburgh of New York University and Richard Stanton, professor at the University of California, the Norwegian government announced today.
“The government proposes new steps to further develop the investment strategy of the two funds.” —Siv JensenIn December, the Norwegian Finance Ministry said it would assess whether its 5% cap on real estate investment should be increased, as well as whether to permit the Norway Pension Fund-Global to invest in unlisted infrastructure. At the end of the year, just 2.2% of its $885 billion was held in real estate.
“The investment strategy of the fund has evolved gradually over time, based on comprehensive professional assessments,” said Norway’s Minister of Finance, Siv Jensen. “Such will also be the case for the current review of real estate and infrastructure investments.”
The government also announced it would be reviewing the investment advice given to the fund.
“Norges Bank and Folketrygdfondet have managed the Government Pension Fund Global and the Government Pension Fund Norway, respectively, in a sound manner over time,” the minister said. “We will build on that. In this report, the government proposes new steps to further develop the investment strategy of the two funds.”
The report, which is being submitted to parliament, proposes that the tracking error for the global fund against its benchmark be increased to from 1% to 1.25%. This will be accompanied by new requirements in the investment mandate for the fund, including supplementary reporting of the risk involved in asset management, the minister said.
Additionally, the central bank is to appoint a committee to review the Central Bank Act and the governance of Norges Bank. This group, led by a former governor of Norges Bank, “must take into account Norges Bank’s responsibility for the management” of the fund, the minister said.
Last year, Norges Bank announced a shake-up of the fund’s hierarchy and asset class silos. Two new CIO positions were created alongside that of a chief risk officer.