AMSTERDAM – The loss of key people is the main reason why fund managers are fired by the Norwegian Petroleum Fund, according to its chief executive Knut Kjær.
“It is not performance,” he said.
Kjær told the IPE Multipensions Conference in Amsterdam that talented people were leaving traditional active managers, often to start hedge funds.
The turnover in the fund’s equity managers was around 10% per annum, he added. Altogether the fund had 68 different internally and externally run mandates, currently 40% of which were run by external managers.
He said that the overall cost of fund management came to around 0.1%, or 10 basis points, of which internal costs were 4 basis points and external management costs 29 basis points, including performance fees.
The fund does not currently invest in alternative asset classes, such as real estate and private equity, he said.
“But hedge funds are not an asset class, and we can use hedge funds as part of our investment today.”
The Norwegian Central Bank would review the question of real estate and private equity later, Kjær said.
Currently the fund stands at $230bn (€195bn), and is growing rapidly, he added.