Norway SWF to Review $471B Equity Pool

A nine-person committee will assess how the sovereign fund should adapt its equity strategy for an expected low-growth environment.

Norway’s government has announced an independent review of its $789 billion sovereign wealth fund’s (SWF) equities portfolio, as the fund seeks to adapt to lower growth prospects.

It has appointed two former finance ministers, two chief economists, and three academics to a nine-person committee that will conduct the review.

The committee’s terms of reference, published by the Ministry of Finance, state that it may recommend changes to the equity portfolio as well as other aspects of the fund’s investment strategy, including the structure of benchmarks, liquidity rules, rebalancing rules, and credit risk exposures.

The group will also assess the impact of equity changes upon the SWF’s growing real estate portfolio and proposed move into infrastructure investments.

At $471 billion as of the end of September 2015, the Norwegian Government Pension Fund Global’s equity portfolio almost as big as the country’s annual economic output ($500 billion in 2014, according to TradingEconomics).

Siv Jensen, Norway’s minister of finance, said the investment strategy for this portion was “the most important decision in terms of the expected risk and return of the fund in the long run.”

The review committee members include:

  • Knut Anton Mork (chair), chief economist at Handelsbanken
  • Harald Magnus Andreassen, chief economist at Swedbank
  • Hilde Bjørnland, professor of economics at BI Norwegian Business School and member of the Swedish Fiscal Policy Council
  • Harald Espedal, former CEO of fund management group Skagen
  • Kristin Halvorsen, former deputy prime minister and Norway’s first female finance minister
  • Espen Henriksen, associate professor in the Department of Finance at BI Norwegian Business School
  • Sigbjørn Johnsen, former minister of finance and current board member at Norges Bank
  • Kari Olrud Moen, former state secretary in the Ministry of Finance and currently executive vice president at financial services firm DNB
  • Karin Thorburn, professor of finance at NHH, the Norwegian School of Economics

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