This review examines our first 20-year history of investing with external managers. It describes the strategy we have pursued when selecting mandate types and offers an insight into our thinking and the lessons we have learned.
External managers have over its 20-year history played an important role in fulfilling the fund’s mandate of the highest possible return after costs with a moderate risk. The overall results have exceeded our expectations by a good margin with an excess return on 1.8 percent annually after costs, or 47 billion kroner.
Over the last 20 years, we have invested with 308 external active equity managers. A core tenet for us has been to keep our approach dynamic. It is essential to adapt processes and strategies to a changing world and to learn from experience. The types of mandates we have awarded have evolved over time – from regional and sector-specific mandates early on, to investments in emerging markets, small companies in developed markets and environment-related companies.
The management review was presented at a virtual NBIM Talk on 16 April. Our CEO, Yngve Slyngstad, and Global Head of External Strategies, Erik Hilde, talked us through the 20-year journey of investing with external managers. We took a virtual travel to meet two of our external managers, located in Shanghai and London.
This review looks at our approach to invest in fixed income to safeguard our assets for the long term. It explains how our fixed-income management originated from the central bank’s management of the foreign exchange reserves. The role of fixed income in the fund is to reduce return fluctuations, meet liquidity needs and reap bond market risk premiums.
Internal active equity management has enabled the fund to develop investment strategies tailored to its characteristics. This review looks at our approach to engaging with companies to gain the investment insight needed to safeguard our assets for the long term.
The fund was set up to shield the Norwegian economy from ups and downs in oil revenue. This review tells the story of how we started buying shares two decades ago and gradually built the world’s largest single owned global portfolio of listed companies.
How did the fund develop from a theoretical economic concept to a trillion-dollar reality? In this review, we tell the story of the fund and its investment strategy from our perspective.
In 20 years, the fund has grown to become the largest single owner in the world’s stock markets. How we exercise our rights and manage our responsibilities as an owner has evolved rapidly. In this review, we share our experience as an investor in over 9,000 companies.
The fund was given a mandate to invest in real estate in April 2010. This publication on the 10th anniversary sums up a decade of real estate investing, and provides an overview of our investments.