Prinsipper for investeringer i realaktiva

Hensikten med dette dokumentet er å skissere prinsipper og krav knyttet til investeringer i, og forvaltningen av, realaktiva i Statens pensjonsfond utland. 

Prinsippene er utformet på engelsk.

Purpose and objective

The purpose of this document is to outline principles and requirements related to investing and managing unlisted real estate and renewable energy infrastructure investments in the Government Pension Fund Global.

The objective is to ensure that relevant risks related to the investment or disposal are identified and adequately addressed, and that the investment process is managed in an efficient and compliant manner, in line with the Government Pension Fund Global Management Mandate. The principles apply regardless of transaction size and decision-making authority, and investment type.

These principles have been issued by the Executive Board, ref.  the Central Bank Act § 2-13 (2) and the Mandate from the Ministry of Finance chapter 2 relevant to the management of the Government Pension Fund Global. 

Real assets investments shall be based on principles and instructions issued by the Executive Board, Norges Bank Investment Management’s mandates, strategy, policies, guidelines, procedures and business processes. 

Principles

1. Investment process and decision making

1.1.
Investments shall be made in accordance with the Ministry of Finance mandate, and the principles issued for the management of the Government Pension Fund Global.

1.2.
Investment activities shall comply with relevant laws and regulations in the markets where the Government Pension Fund Global is invested.

1.3.
Investments in real assets shall be regulated through investment mandates. The mandates shall define investment universe, investment restrictions, investment approval limits and other specific investment rules as applicable. 

1.4.
The investment mandates shall be approved through the reporting line and shall be subject to annual review and monitoring for adherence to risk limits and mandate-specific investment rules and restrictions.  

1.5.
Norges Bank Investment Management shall establish guidelines for the use of advisory and decision-making committees, including possible advisory boards, Leader Group investment meeting and the boards in the investment structures.

1.6.
When considering an investment opportunity, Norges Bank Investment Management shall assess and make assumptions based on relevant prudent market practice. All investment cases shall be documented.

1.7.
Investments shall be subject to due diligence in accordance with the Executive Board’s principles for risk management in Norges Bank Investment Management.

1.8.
Investments of major importance or of an unusual nature shall be presented to the Executive Board for approval. The presentation shall explain why the investment case is presented and highlight the relevant risks that Norges Bank Investment Management has considered. 

When assessing if an investment is of major importance or of an unusual nature, Norges Bank Investment Management shall among other things consider if the structuring of the investment is considerably different from previously used structures, if the investment opportunity concerns listing or delisting of a corporation, if new types of guarantees need to be provided by Norges Bank or if the transactions can result in reputational issues that are not within the Norges Bank Investment Management CEO’s authority to accept. Reference is made to the Executive Board’s principles for risk management in Norges Bank Investment Management and the CEO Job description.

2. Investment structures and entities
   

2.1.
The real assets investment shall not expose Norges Bank directly or indirectly to liability and shall not impact the legal and tax position (including immunity relevant to enforcement and tax) of Norges Bank, the Norwegian State or the Government Pension Fund Global assets, and shall not create risk of permanent establishment for Norges Bank.

2.2.
Investments shall be made through Norwegian and foreign entities to limit liability and to protect Norges Bank and the Government Pension Fund Global assets. Foreign entities must be established and registered in countries that have tax treaties or treaties on information exchange with Norway. Reference is made to the Government Pension Fund Global Management Mandate § 2-1 (2) d).

2.3.
The investment structure for an investment shall follow recognised prudent market practice and shall be assessed against the tax and operational risk associated with the structure prior to the actual investment.

2.4.
Norges Bank’s external auditor shall normally be appointed as auditor in wholly or partly owned companies where Norges Bank Investment Management has influence over the appointment of the auditor. If Norges Bank’s external auditor is not appointed, Norges Bank Investment Management shall participate actively in the choice of auditor and the audit model Reference is made to the Executive Board’s principles for the supervision and formation and acquisition of subsidiaries in the management of the Government Pension Fund Global.

3. Management of investments

3.1.
Norges Bank Investment Management shall issue policies and guidelines for the management of the real assets portfolio.

3.2.
Policies and guidelines shall set requirements to the different types of management models.

3.3.
When investing with joint partners and fund managers, Norges Bank Investment Management shall seek to partner with well-known and respected investors with long term capital to deploy and a long-term investment horizon whose interests are aligned with the interests of Norges Bank Investment Management.

3.4.
Norges Bank Investment Management shall when choosing external asset managers look for professional and reputable asset managers with good knowledge of the specific market and with a good track record of managing assets in the relevant markets.

3.5.
Norges Bank Investment Management shall as a main principle manage its wholly owned assets internally through its asset management company. 

3.6.
Norges Bank Investment Management shall seek to minimize asset management costs and include flexible contract termination provisions.

3.7.
Investment agreements shall be guided by guidelines established by Norges Bank Investment Management, to give sufficient or appropriate influence over major decisions and alignment of strategy and expectations in the management and operations of the investments. The guidelines shall include key contractual clauses for real asset investments agreements.  Investment agreements shall aim to limit Norges Bank’s exposure to non-financial risk by limiting investments in certain countries, sectors, and types of projects, and require fund managers to report on their responsible investment activities in line with internationally recognised standards and principles. Investment agreements shall ensure that NBIM can comply with external and internal transparency requirements, including sharing information with relevant third parties.  

3.8.
Investments in real assets shall be managed in a responsible and environmentally sustainable manner, reference is made to Principles for Responsible Investment Management and Guidelines for Observation and Exclusion from the Government Pension Fund Global.

4. Reporting to the Executive Board

4.1.
New investments and investment structures shall be reported periodically to the Executive Board, reference is made to the Executive Board’s principles for the supervision and formation and acquisition of subsidiaries in the management of the Government Pension Fund Global. The reports shall include key information about the investment.

4.2.
Real assets risk and performance numbers shall be reported periodically to the Executive Board.

4.3.
Mandate breaches and critical and significant incidents shall be reported periodically to the Executive Board.