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Impact Investing

IPE special report May 2018

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Petroleum Fund funds seven new mandates

NORWAY – The NOK1.28trn (€161.3bn) Petroleum Fund transferred capital into two fixed income and five equity mandates in the third quarter.

It said it funded new US specialist fixed income mandates to Babson Capital Management LLC and Smith Breeden Associates Inc.

And regional equities briefs were funded with MFS Investment Management, Barrow Hanley Mewhinney & Strauss Inc., Aberdeen Asset Management, NWQ Investment Management Company LLC and Fidelity Pensions Management.

The size of the mandates was not disclosed.

The announcement came as the fund reported a return on investments in the quarter of 3.21%, 0.18 points higher than benchmark.

Equities returned 8.24% while fixed income had a negative return of –0.07%.

The overall return in the first three quarters of 2005 was 8.27% - 0.53 percentage points above benchmark.

The fund has grown by NOK97.2bn in the quarter – due to a market return of NOK38.2bn and NOK 65.3bn in new capital.

At the end of the third quarter, 22% of the fund was managed by external managers, although external management costs accounted for 64% of total management costs.

It incurred transaction costs of NOK124.4m in the quarter, or 0.19% of the NOK65.3bn transferred.

The fund disclosed two minor breaches of its investment guidelines during the quarter.

One was in connection with securities lending where the collateral received was reinvested in a security issued by a Norwegian company. The other was the purchase of an equity which was not listed on an approved exchange.

It said: “In both cases the sums involved were modest, and the positions have been closed.”

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