Norges issues vast $5.5 bn equity RFPs
NORWAY- Norges Bank Investment Management (NBIM), overseer of the $75bn Norwegian petroleum fund, has announced a $5.5bn equities RFP with the initial tender process being run through the IPE-Quest electronic manager selection system at http://NBIM.IPE-Quest.com.
NBIM is looking to appoint new external active mandates in five different regions: Europe, UK, Japan, Australia and the Americas. Initial funding for each mandate will be a minimum of $250m but Yngve Slyngstad, head of equities at NBIM, says the average will be around the $500m mark.
The fund already has managers for Europe, UK and Japan, but specialist regional managers for Australia and the Americas are a first. Slyngstad says they are undecided on how many mandates they will award but that they tend to stick to a maximum of three or four managers per region.
NBIM is not looking specifically for growth or value managers, rather for those with a core product and relatively high tracking errors of around 5%.
The new RFP is the result of continued surpluses from Norway’s oil industry. Inflows to the fund last year alone totalled around $24bn according to figures from the revised national budget for 2001.
When Norges Bank last put out an RFP for regional mandates in 1998, it received more than 120 applications from 50 different investment managers.
At present the fund uses Merrill Lynch for its UK equities and, in Europe, ABN Amro AM, Blackrock, Capital International and Gartmore. For Asia and Japan it employs Capital International, Fidelity, Schroders, Sparx and Scudder.
These managers are eligible to reapply but Slyngstad says they are already part of an ongoing funding programme and many already manage significant mandates for the fund.
It is the last series of regional appointments in 1998 that are now being expanded but an apparently ceaseless flow of assets into the fund means it has had to broaden the investment strategy to a three pronged approach.
Norway’s petroleum fund started by awarding regional mandates but is now moving more towards specialist mandates including sector and small cap mandates.
Last year NBIM put out tenders for telecoms, technology and healthcare/pharmaceuticals mandates and there is likely to be more money for other sectors next year.
The deadline for applications for the latest funds is 14th June. Further information is available on Norges Bank’s website www.norges-bank.no/