Norway’s oil fund to double equity staff: FT

Norway's oil fund plans to double its staff of equity fund managers as it takes a more active approach to its investments, Petter Johnsen, its chief investment officer for equities, has told the FT.

Norway's oil fund to double equity staff: FT
Petter Johnsen - Photo: Norges Bank
The Government Pension Fund of Norway, as the fund is officially known, overtook Abu Dhabi's sovereign wealth fund in 2012 to become the world's largest.  But it has come under criticism for what some see as its overly cautious investment strategy and relatively low returns, with some politicians in Norway calling for it to be split up. 
"It needs to be double the size and larger, so we are recruiting actively,” Mr Johnsen said. "This group will expand quite a lot going forward. We’re still in a build-up phase." 
He said he was particularly looking to hire experts in sectors such as US banks and European insurers.
"In terms of how we’ve picked [which sectors to focus on] it’s based on who we recruited, but it’s also based on where we think we can utilise the fund’s characteristics to the best extent possible and maybe also where we actually have had success,” Johnsen said. 
The fund at present has 85-90 people in its equity unit based around four divisions: one comprising sector specialists, another dealing with special situations, such as initial public offerings, another looking at global equities, and the last one running training programmes. 
Johnsen told the paper that despite the fund's size, with $540bn invested in equities, he believed he had shown it was “fully capable of managing a large fund”.

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Norway oil fund loses 18 billion euros in first half of 2020

Norway's huge sovereign wealth fund, the world's biggest, lost 188 billion kroner (18 billion euros, $21 billion) in the first half of the year as the global economy reels from the Covid-19 pandemic, the central bank said Tuesday.

Norway oil fund loses 18 billion euros in first half of 2020
Unusually empty slopes and ski lifts in Hemsedal in April. Photo: AFP

The fund, in which the Norwegian state's oil revenues are invested, was hit by plummeting share prices, with stocks accounting for 69.6 percent of its investments.

Its share portfolio posted a negative return of 6.8 percent in the first six months of the year.

At the end of June, the fund was valued at 10.4 trillion kroner (989 billion euros), up from the 9.98 trillion kroner seen at the end of the first quarter.

“The year started with optimism, but the outlook of the equity market quickly turned when the coronavirus started to spread globally,” the fund's deputy chief executive, Trond Grande, said in a statement.

“However, the sharp stock market decline of the first quarter was limited by a massive monetary and financial policy response,” he added.

Real estate investments, which represent 2.8 percent of the portfolio, also posted a negative return, of 1.6 percent, while bond investments, which account for 27.6 percent of assets, posted a gain of 5.1 percent.

“Even though markets recovered well in the second quarter, we are still witnessing considerable uncertainty,” Grande said.

The fund is meanwhile still mired in controversy over the appointment of a new chief executive.

Nicolai Tangen, a billionaire who founded the AKO Capital hedge fund in London, is due to take over the fund on September 1st, replacing Yngve Slyngstad who is retiring.

But critics have complained about Tangen's possible conflicts of interest, as well as his use of tax havens.

The central bank has meanwhile been criticised for irregularities in the recruitment process.

As a result, some major political parties are opposed to Tangen's appointment, and it remains up in the air.

READ ALSO: Norway's oil fund loses 1.3 trillion kroner ($125bn) in coronavirus crash