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IPE special report May 2018

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Norway's oil fund in $3.5bn tenders

The NOK357bn (e44bn) Norwegian Government Petroleum Fund (Petroleumsfondet) is inviting tenders to specialist investment mandates with a potential value of $3.5bn (e3.9bn), which will include the fund’s first sector mandates – a novel investment move for a European fund.
The briefs cover three areas: enhanced indexing, active sector specialist and active small-cap investments and will be managed against regional benchmarks based on the FTSE universe - with some in-house tailoring relevant to the respective industry sectors.
The enhanced indexing mandates, initially for $500m each, will be split between two managers covering three regions: the Americas, Asia/Pacific and Europe. Deadline for applications is January 7.
Eight managers will be selected to run the active sector specialist mandates, initially funded at $250m each. The briefs will cover the technology, financials, healthcare and telecommunications sectors.
Preference has been put on global mandates but regional proposals will also be considered. Deadline for submissions is January 15.
Some $750m has been put aside for regional active small-cap mandates with six managers expected to cover Europe, the UK, the Nordic area and Japan. Deadline for submissions is February 1.
“The name of the game is to have more and more specialist mandates,” says Yngve Slyngstad, head of equities at Norges Bank Investment Management. “Many fund managers have currently organised their investments based on the assumption that the financial universe is divided into regional areas. Some of them have come up with good global products but that is more of an exception.
“We do not know exactly what we will find, who will apply and to what extent they have established their products based on the idea of regional division, but it is obviously the way the industry will go,” says Slyngstad.

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