NORWAY- Norges Bank Investment Management, overseer of the 85 billion dollar (84 billion euro) Norwegian petroleum fund, has announced equity request for proposals, or RFPs, worth a combined 1.25 billion dollars.
Norges Bank is looking to place approximately 500 million dollars in active specialist sector mandate(s) within the consumer staples/defensive area of the market. The mandate is active equity with an average tracking error against the relevant benchmark of 5%. The initial tender is being run through the IPE-Quest electronic manager selection system at http://NBIM.IPE-Quest.com.
The benchmarks for the individual mandates will be based on the FTSE World Index sectors: beverages; food producers and processors; personal care and household products; tobacco and food; and drug retailers.
As with many of Norges’ previous mandates, the final details are often influenced by the type of applications received. No decision has been taken on whether they will be global or regional and managers are being asked to state which, if either, they tend to specialise in. The mandates will initially be in the region of 200 million dollars.
In addition, Norges is also looking to invest approximately 750 million dollars in active specialist sector mandate(s) within the consumer cyclical and business area of the market.
The active equity mandate(s) will have an expected average tracking error of 5% against the FTSE World Index benchmarks: automobiles and parts; household goods and textiles; general retailers; leisure, entertainment and hotels; media and photography; support services; transport; and food and drug retailers.
‘”There is a preference for focused products managed against benchmarks such as automobiles and parts, or narrow compilations of sectors such as leisure, entertainment and hotels, and media and photography. Managers with multiple distinct products to put forward within the broader area should apply individually for each product, “ says Norges.
Once again the initial funding of individual mandates will typically be in excess of 200 million dollars, and mandates will be awarded in a global as well as a regional level.
The mandates to be awarded are part of the so-called sector strategies approach within NBIM Equity. The petroleum fund started out by awarding regional mandates but a vast and continuous flow of assets has forced it to move towards sector and small cap mandates.
Says a spokesman at the fund: “We believe that these sectors could create excess returns for the fund. The process will probably take between three and six months.”