Norway’s sovereign wealth fund plans to use more external managers

On the 11/20/20 at 7:51AM

Norges Bank Investment Management (NBIM), the sovereign fund that manages Norway’s petroleum revenues, plans to expand its use of external asset managers next year. Jon Nicolaisen, vice-governor of the Bank of Norway, in charge supervising NBIM, said the fund could delegate up to 5% of all its assets under management. The 5% cap has thus far been meant for the equity portfolio.

As of the end of 2019, 3.9% of NBIM’s assets were outsourced to external managers, particularly in emerging equities and small caps. Nicolaisen described the increased use of asset managers as a way to spread the fund’s risks over a larger number of markets, and “to avoid companies or sectors with weak governance or problematic business models.”