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Is There Growing Politicization of Norway’s Sovereign Fund?




Norway has been able to amass tremendous financial wealth from petroleum revenue over the past fifteen years. The wealth fund commands attention from policymakers, asset managers and the citizens of Norway. Thus, Norway’s Government Pension Fund Global (GPFG), the ex-Norway part of oil-derived assets, wields significant influence when it comes to corporate governance and investment policy. For example, allocation to renewable and environmental strategies gained further traction in 2009, amid pressure from Norwegian politicians. During that period, Norway’s sovereign fund awarded mandates to a number of external managers in environmental-related mandates. By 2014, Norges Bank Investment Management (NBIM) established their first portfolio dedicated to green bonds, in which the reference portfolio is based on a sub-segment of the Barclays MSCI Green Bond Indices. In parallel, NBIM has excluded a number of companies from its portfolio based on recommendations from its Council on Ethics which was established by Norwegian royal decree in November 2004. Divested companies were in violation of areas such as excessive greenhouse gas emissions (cement companies, oil sands firms, and coal-fired plants), deforestation, water issues and corruption. These inclusionary and exclusionary investment policies, so far, have had a negligible impact on the fund’s growth and performance, while signaling to the capital markets their beliefs on how companies should be properly managed.

Norway’s wealth assets are at an inflection point.

Political Parties Have Different Dreams of Norway’s Sovereign Wealth Assets

With that being said, there has been talk by Norwegian politicians of dividing up Norway’s massive pile of sovereign wealth into mission-driven funds. Norway’s ruling Conservative Party publicly agreed to this idea. Norway’s Green Party has been able to sway the country’s parliament to force the wealth fund to divest from coal investments, while advocating the wealth fund partake in large-scale renewable investments. There is also talk of more investment into infrastructure. The biggest news driver is Norway’s own economy, in which the key policy rate was lowered from 0.75% to 0.5%, while the Norges Bank Governor warned the fund will withdraw some assets.

Dag Dyrdal from Montalban AS penned a paper in Internasjonal Politikk titled, “Tverrpolitisk pensjonskasse eller aktivt politisk verktøy?” It essentially translates in English to Bi-partisan Pension Fund or Active Political Tool? Dyrdal in his paper praises past Norwegian politicians on keeping up with the fiscal rule, even during tough times in 2007 and 2008. Dyrdal concludes that the wealth fund has achieved success based on broad consensus from Norway’s parliament, but also limited politicization of the wealth fund, at home and abroad.

Norway’s wealth assets are at an inflection point. With increasing external pressures from prolonged low oil prices, currency turmoil, and a weakened domestic economy, Norway will have to decide how much capital from the fund they will want to tap to achieve their goals.

SWFI First Read, December 13, 2018



Turkey Wealth Fund Could Tap Debt Markets in 2019

Turkiye Varlik Fonu or Turkey Wealth Fund could be issuing a large bond in 2019. The loan would most likely be short term in nature with a maturity of two years and be syndicated.

Rahm Emanuel Suggests Bonds to Help Support Chicago Pensions

The outgoing Chicago Mayor Rahm Emanuel revealed a plan on possibly issuing US$ 10 billion in bonds in funding Chicago’s underfunded pension funds. Chicago’s four pension funds have an average funding ratio of 26%. In March 2016, the Illinois Supreme Court ruled an earlier pension reform law effecting employees and laborers’ pension funds that was signed by then Illinois Governor Pat Quinn that the law was unconstitutional.

SoftBank and Alibaba Back PT Tokopedia

PT Tokopedia is an Indonesian generalist e-commerce site. Tokopedia raised US$ 1.1 billion in an investment round led by the SoftBank Vision Fund and Alibaba Group. Softbank Ventures Korea and other investors participated in the round as well. William Tanuwijaya is the CEO and Co-Founder of Tokopedia.

Tikehau Capital and Total SA Form Low Carbon Fund

Tikehau Capital and Total SA created a private equity fund to focus on supporting the energy transition to cleaner sources of energy. The fund held a €350 million first close and raised money from investors such as Bpifrance and Groupama as anchor investors.

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Italian ANAS and RDIF Invest and Build the Fourth Section of Moscow’s Central Ring Road



The Russian Direct Investment Fund (RDIF) inked a deal with ANAS S.p.A. (formerly known as Azienda Nazionale Autonoma delle Strade), the Italian state highway management company, to implement a concession agreement to build and operate the fourth section of the massive Moscow Central Ring Road. The transaction expects to be finalized in the first quarter of 2019. This is the final section of Central Ring Road, which is 96.5 kilometers long. According to the RDIF, “Under the terms of the concession agreement, the cost of construction is 85.4 billion rubles, of which the concessionaire will provide 49.7 billion rubles and private investors will provide 35.7 billion rubles.”

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Follow the Money – Episode 48



This long-form podcast was recorded on December 11, 2018. Michael Maduell dissects the latest geopolitical trends that can impact institutional investors such as pensions, sovereign wealth funds, and endowments. Maduell lends his opinion on the lawsuit of Neiman Marcus and bumps in the road for augmented reality.

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1:15 Huawei, Canada, Brexit, and Macron Headache
6:30 Sovereign Wealth Fund Asset Allocation
9:58 India Gets a New Central Bank Governor
13:26 Pensions Go Bust on U.S. Retailers
17:04 Augmented Reality and Sovereign Funds
22:00 Former CalPERS CIO Goes to Morgan Stanley Investment Management
24:30 Oman Investment Fund Goes on Defense in Public Markets
25:00 Japanese Scandals and Opportunities


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The views in this media are expressed by Michael Maduell and other participants and are not reflective of the Sovereign Wealth Fund Institute (SWFI).

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