Strategy 2020-2022 Norges Bank Investment Management
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Strategy 2020–2022 Norges Bank Investment Management
Fund strategy 05 Ownership strategy 09 Investment strategies 12 Management strategy 17
Our mission is to s afeguard
and build financial wealth
for future generations
Strategy 2020-2022 | Norges Bank Investment Management
Strategy
2020-2022
The Government Pension Fund Global is a large, global investment fund
with a long-term investment horizon. Our management of the fund shall
safeguard and build financial wealth for future generations.
In September 2017, the fund’s value passed 1 trillion US dollars. Trends and
disruptions in the global economy such as increased trade barriers, low global
interest rates, changing technology paradigms and climate change will affect
the fund. We should be prepared for large fluctuations in the fund’s value.
3
The strategy for 2020-2022 continues in the direction set by the 2017-2019 strategy.
Our strategic direction for the next three years is to:
• Complement the fund’s investments in equities and fixed income by investing in
real estate and renewable energy infrastructure
• Exercise our ownership role to safeguard the fund’s long-term economic interests
• Utilise a set of diversified investment strategies in a risk-controlled and
low-cost manner
• Foster a global, performance-oriented and efficient investment organisation
Strategy 2020-2022 | Norges Bank Investment Management
STRATEGY
Fund strategy
The Government Pension Fund Global was A number of important
established in 1990 as a fiscal policy tool to choices have been made
underpin long-term consideration when since we received the Today, we manage
phasing petroleum revenue into the Norwegian management assignment
a global portfolio
economy. The fund is currently one of the more than 20 years ago.
largest single-owner funds in the world with Today, we manage a dominated by public
assets worth more than 9,000 billion kroner. global portfolio market equity risk.
dominated by public
The fund is owned by the Norwegian people. market equity risk, albeit with an increasing
The Ministry of Finance decides the overall share invested in other real assets.
investment strategy for the fund. Material
changes to fund strategy are anchored in the Reliance on indices
Norwegian Parliament. Long-term sound The fund strategy is expressed through the
management of the fund helps ensure that management mandate. The mandate defines
both present and future generations can a benchmark index and puts certain constraints
benefit from Norway’s petroleum wealth. and requirements on us as the operational
manager. The benchmark index is based 5
The operational management of the fund is on indices from external providers and is
delegated to Norges Bank. Our management dominated by listed equities.
assignment is laid down in a mandate issued
by the Ministry of Finance. We act in a There are investment opportunities available
professional and transparent way to build trust that will improve the diversification of the
and legitimacy. Public accountability is vital. fund beyond what can be achieved through
the benchmark index. This is particularly true
The fund strategy has been developed gradually for investments in unlisted assets such as
over time. Discussions often take place in the real estate and renewables, and for factor
public domain. We contribute to the public investments in the listed markets. These
discourse and the development of the fund investments cannot be defined through
strategy by publishing relevant research and an index, will normally be large, limited in
through our role as an advisor to the Ministry number and have a long verification horizon.
of Finance. Proximity to the actual portfolio
and our experience from the management of We have created a
the fund provide a good basis for relevant reference portfolio to set
advice to the asset owner. We aim to facilitate the exposure to these The reference
additional research on topics of relevance for types of investments. We portfolio serves
our management of the fund. We will publish will continue to develop
as a starting point
more internal research and strengthen our the reference portfolio
collaboration efforts with academics, peers to improve the fund’s for our investment
and practitioners. long-term risk-return strategies.
characteristics.
We also use the reference portfolio to facilitate reference portfolio will still include government
cost-efficient transitions and to fulfil specific debt issued in selected emerging-market
requirements in our management mandate. The currencies. We target a level of emerging-
reference portfolio serves as a starting point for market debt close to 1 percent of the fund.
our investment strategies described in a later
chapter. Equity risk
The choice of equity share in the fund is the
Global investments choice with the greatest impact on total return
The fund is in its entirety invested outside and risk. During the last strategy period, the
Norway. Our portfolio has over time become equity share in the fund was increased to 70
more global. The fund is currently invested in percent. 70 percent equities in the fund’s
close to 70 different equity markets and fixed benchmark index reflects the asset owner’s
income issued in more than 25 currencies. willingness to take market risk in order to
achieve satisfactory long-term returns.
The geographical composition of the fund has
been tilted towards European investments since We do not expect any changes to the equity
6 its inception. In the course of the strategy share in this strategy period. With 70 percent
period, the Ministry of Finance will assess the of the fund exposed to equity market risk, one
geographical composition of the fund’s equity should be prepared for significant fluctuations
benchmark. Any changes to the fund’s in fund value. The risk in the fund, however,
geographical composition will be implemented cannot be captured in one single measure. We
gradually. will develop alternative risk measures for use in
our communication about risk in the fund and to
We aim for a geographically diversified equity assess the need for changes to fund strategy.
portfolio. Equity investments in selected
emerging and frontier markets are included in The return on the fund will be dominated by
the reference portfolio to further improve developments in the broad equity markets.
diversification. The number of markets may To improve the portfolio’s long-term risk-return
decline as we continuously assess the rationale characteristics, we continue to include
for investing in some of the smaller emerging systematic equity factors in the reference
markets. portfolio. We target a balanced exposure to
these factors of approximately 3 percent of
Going forward, emerging-market debt will not be the fund.
part of the fund’s benchmark index. In order to
improve the risk-return profile of the fund, our
Strategy 2020-2022 | Norges Bank Investment ManagementFUND STRATEGY
Public markets Real assets
The fund’s investments in listed equities and A limited share of the fund may be invested in
fixed-income markets currently make up more real assets. Our real asset investments include
than 95 percent of the fund. listed and unlisted real estate and renewable
energy infrastructure assets. We invest in real
In equities, we invest in large, medium-sized assets to improve diversification.
and small listed companies. Public market
investments provide transparency, liquidity and The allocation to real
a minimum level of corporate governance. Over assets is reflected in
the past few years, we have witnessed a change the reference portfolio. We invest in real
in market dynamics. The number of new listings We target a real estate
assets to improve
has declined, and companies seem to stay portfolio, made up of both
private for longer. We will consider further listed and unlisted assets, diversification.
investments in companies prior to their public of 5 percent of the fund.
listing. The real estate portfolio will be well-diversified
across office, retail, residential and logistics.
Within the fixed-income universe, the reference Renewable energy infrastructure is a new asset 7
portfolio is dominated by investment-grade class for the fund. We target a portfolio of
government and corporate bonds from renewable energy investments of around 1
developed-market issuers. We may consider percent of the fund towards the end of this
including additional fixed-income segments strategy period.
from developed markets in the reference
portfolio.8 Strategy 2020-2022 | Norges Bank Investment Management
STRATEGY
Ownership strategy
The future value of the fund depends on the Establishing principles
value created by the companies in which we Good governance of companies protects our
invest. Well-managed companies provide goods rights as an investor and contributes to well-
and services and functioning markets. We contribute to improved
employment and corporate governance through our work on
spur innovation for standard setting and our own expectations
We aim to be a society as a whole. and positions.
constructive owner.
The fund is a long-term Global standards
investor in over 9,000 companies. We aim to We benefit from well-functioning markets that
be a constructive owner in these companies enable global value creation. Global governance
by promoting good corporate governance. standards, as well as local market regulations,
We take a principle-based approach, using are under continuous development. We aim
the best available data to make decisions, and to contribute to the further development of
are transparent about our activities. global standards that promote good corporate
governance and responsible business conduct.
Our ownership strategy supports the fund’s We encourage the wider adoption of global 9
overall management objective of a high long- standards across markets and companies and
term return after costs. We seek to improve the offer our perspectives as a market participant
long-term financial performance of our to public consultations on relevant standards.
investments and to reduce the financial risks. We will engage regularly with international
We do this by considering environmental, social organisations, regulators, and other standard
and governance issues that may have an impact setters.
on the fund’s performance over time.
We integrate these issues into our work by Principle-based approach
establishing principles, exercising ownership We were early in developing a principle-based
and managing risk. We focus on corporate approach to responsible investment. An important
governance issues and areas of long-term element in our approach has been to publish our
financial relevance. expectations on how companies should address
key environmental and social risks and
We are transparent about how we implement our opportunities. Since 2008, we have published
ownership strategy and provide comprehensive seven expectation documents covering human
information on the responsible management of rights, children’s rights, climate change, water
the fund. We will seek new ways of making this management, ocean sustainability, tax and
information publicly available. transparency and anti-corruption. The expectation
documents reflect our priorities as a long-term
investor and are an important basis for our
ownership activities. We share these with the
companies we are invested in and the broader
public to provide predictability.Since 2015, we have published six position papers, Voting
covering proxy access, board elections, executive As a shareholder we have an important
remuneration and effective boards. We will responsibility and right to vote at shareholder
continue to publish position papers on corporate meetings. Through voting, we seek to strengthen
governance issues. We base our positions on governance, improve performance and promote
research and will further develop our access to responsible business practices in companies.
relevant data to inform our priorities. We vote in a principled manner to support our
interests and our starting point is to support the
Research company and its board. We seek to be consistent
Understanding of how the governance in the way we apply our principles to individual
of companies and their management of companies and agenda items.
externalities may affect financial return and
risk is evolving. We collaborate with academic Given the high number of shareholder meetings,
institutions to access the latest research and we depend on reliable voting processes. We are
obtain insight that can inform concerned that there is a lack of uniformity and
our ownership activities. We will support efficiency in voting processes across markets.
10 and initiate research projects to provide We will contribute to the further improvement of
further theoretical foundations, empirical market infrastructure for proxy voting to safeguard
results and new sources of data to advance the fund’s ownership interests globally. We aim to
our understanding of these issues. vote at all shareholder meetings unless there are
significant obstacles to doing so.
Excercising ownership
We promote the alignment of interests between We are open about how we vote and aim to
us as shareholder and the companies we invest promote greater transparency throughout the
in. We do this through voting process. Since 2013, we have published our
shareholder voting voting instructions one day after the shareholder
We seek to be and through engaging in meeting, and we have in some cases announced
dialogue with companies. ahead of the meeting how we intend to vote. By
consistent in the way
the end of the strategy period, we aim to publish
we apply our principles all our voting instructions ahead of shareholder
to individual meetings where this is practicable.
companies and
agenda items.
Strategy 2020-2022 | Norges Bank Investment ManagementOWNERSHIP STRATEGY
Dialogue Corporate reporting
We believe that dialogue with companies is in We will contribute to the strengthening and
many cases an effective way to exercise our further alignment of corporate sustainability
ownership role. In our dialogue, we communicate reporting standards across markets. We support
our support for long-term value creation, our the development of standardised reporting
expectations of companies, and our positions metrics where these are not yet available.
on good corporate governance. We support
companies’ establishment of effective We expect companies to use internationally
governance structures, and consistent execution recognised calculation methodologies. We
through strategy setting, capital allocation, focus on indicators and metrics that provide
business targets and risk management. information about the company’s actual
performance on material issues. Examples of
We will prioritise our most significant holdings these are greenhouse gas emissions, energy use
W
and focus on issues where we can achieve and energy mix, green revenues, water use and t
results beyond single-company outcomes. We waste management.
t
use dialogue to pursue sector-related issues
and follow up on incidents or long-term risks Risk exposure 11
identified through our portfolio monitoring. We aim to mitigate the fund’s exposure to
We may also carry out engagements through unacceptable environmental, social and
letters and participation in industry initiatives. governance risks. Companies may be followed
up through ownership work or through risk-
Managing risk based divestments. Examples are business
We aim to reduce the fund’s exposure to long- models that do not conform to prevailing
term risks. To do this, we need consistent and technological, regulatory or environmental
comparable information requirements or trends.
about companies’ risk
exposures and activities. We invest in companies with a positive
We aim to reduce A key premise for our work environmental profile through our environment-
the fund’s exposure is corporate reporting. related investment mandates. We will
improve our data to identify companies with
to long-term risks.
environmentally friendly solutions or technology
with strong performance or potential.Investment
strategies
We invest across the three asset classes of Efficient market exposure
equities, fixed income and real assets. We use Around 80 percent of the equity portfolio will
a diversified set of be managed internally through efficient market
investment strategies in exposure strategies. For a fund of our size and
a risk-controlled and low- global reach, it is critical to manage overall market
Our investment cost manner to exploit exposures efficiently. We invest broadly in the
strategies are time-varying market oppor- companies in the reference portfolio but seek to
tunities. In aggregate, our avoid mechanical benchmark replication with its
complementary investment strategies seek high trading costs. We will enhance our portfolio
and tailored to to efficiently represent the construction and trading strategies, including
broad risk premia for the the use of new technologies and venues, to
the fund’s unique
asset class and consistently further reduce turnover and market impact.
characteristics. generate excess returns. We continue to take an active role in promoting
The strategies are well-functioning financial markets.
complementary and tailored to the fund’s risk
tolerance and unique characteristics as a large, We seek to identify and exploit relative value
12 long-term investor with low short-term liquidity opportunities. Special situations such as share
needs. classes and dual listings are an important but
small part of these opportunities. We will increase
Across all investment strategies, our operating our active positioning around corporate actions
model is characterised by specialisation, delegation and capital market events such as initial public
and diversification. We grant our investment offerings and secondary offerings.
professionals delegated authority within their
specialisation across asset classes, regions and We manage an efficient outsourced securities
sectors. We emphasise deep research and market lending programme through our agent and
expertise across all areas. supplement this with internal capabilities to
maintain profitability. We seek to further
Equity investments integrate our lending decisions into the portfolio
The fund’s reference portfolio for equities management process. Investment banks are our
spans around 8,500 companies in close to most important borrowers, but we will seek to
70 markets. diversify to other counterparties. We will expand
our internally managed synthetic lending
Our investment strategies are tailored to the programme to new markets.
different segments of the equity markets and
aim to cost-efficiently construct portfolios with
exposure to countries and industries similar to
the reference portfolio while taking advantage
of opportunities at a company level. They can
be broadly divided between capture of equity
risk premia through efficient market exposure,
and fundamental research through company
knowledge strategies.
Strategy 2020-2022 | Norges Bank Investment ManagementCompany knowledge Most internal portfolio managers manage
Our investment strategies based on tailored sector mandates and invest mainly in
fundamental research can be divided into larger companies in developed markets. We
internal and external portfolio management. aim to cover around 1,000 companies in detail,
and will increase from 50 to 60 internal equity
The fund is one of the portfolio managers. We continue to focus on
largest global equity Europe, where our ownership stakes are the
Meeting companies owners, and our highest. We will increase our company research
in China as well as expand our coverage of mid-
is an essential part knowledge of our largest
company investments cap companies in Europe. Our industry-based
of our investment contributes to fund environmental mandates and specialised capital
process strategy, improves risk markets mandates will be a smaller part of our
management and ensures activities.
that we are able to fulfil
our ownership role. We make investment We use external portfolio managers in equity
decisions based on in-depth knowledge of markets and segments where local specialist
companies and the markets in which they knowledge is particularly relevant. We expect 13
operate. We target for internal portfolio external portfolio managers to manage around
managers to manage around 15 percent of 5 percent of the equity portfolio. We aim to
the equity portfolio. increase from 80 to 100 external specialist
mandates. Around two thirds of our external
Meeting companies is an essential part of our specialist mandates will be in emerging markets.
investment process. We use such meetings to Except for China, Brazil and India, we expect
deepen our understanding of companies, to close to all emerging market investments to
develop long-term relationships with company be managed by external fund managers. We
management and to discuss governance issues. invest in country mandates focused on small-
We organise access directly with companies cap companies in developed markets in Europe
to improve the quality of meetings and our and Asia Pacific, and continuously look for
company relationships and be less reliant new focus areas for specialist external fund
on third parties for access. managers. We favour locally based,
independent specialist managers.
We do our own research on companies, rather
than depending solely on the analysis from
external research providers. This enables us
to form views that are proprietary, insightful
and different from the market consensus.
We will use a wider variety of information
sources in our research.Fixed-income investments We seek to exploit price differentials between
The fund’s reference portfolio for fixed income bond and derivative markets and will increase
spans around 2,000 government and corporate our usage of standard derivatives to take
issuers in 34 currencies. advantage of segmentation opportunities.
Our investment strategies are tailored to Within emerging markets, we invest primarily
government and corporate bond segments and in government issuers but also selectively in
aim to cost-efficiently construct portfolios with large corporate issuers. We will enhance our
exposure to key risk drivers similar to the currency rebalancing and positioning to reduce
reference portfolio while taking advantage of implementation costs and better manage
opportunities at a security, issuer and sector currency risk.
level. They can be broadly divided into capture
of fixed-income risk premia through efficient Fixed-income securities lending is primarily driven
market exposure, and fundamental research by time-varying demand for term borrowing of
through corporate issuer knowledge strategies. high-quality and liquid assets from bank
counterparties. We will actively size our lending
14 Efficient market exposure exposure dependent on market conditions. We
Around 75 percent of the fixed-income portfolio will supplement our outsourced lending model
is managed through efficient market exposure with internal lending of special bonds with high
strategies, primarily in the government lending value through the repurchase market.
bond segment. As a replication strategy with
thousands of bonds is both challenging and Corporate issuer knowledge
expensive, we construct our portfolio with Around 25 percent of the fixed-income portfolio
considerably fewer investments than the is managed through fundamental research
reference portfolio. We seek to take advantage strategies, primarily in the corporate bond
of primary markets to build exposure and capture segment. We base corporate bond investment
new issue premia to enhance expected return. decisions on a thorough understanding of
We will use new trading technologies that can companies and the sectors they operate in, and
further reduce our implementation costs. we aim to have internal research coverage of
all the large issuers in the reference portfolio.
We will increase the use of relative value We expect to lend to under half of all the issuers
strategies to enhance return. Many securities in the reference portfolio. Our corporate bond
are close substitutes, and we seek to take and equity portfolio managers cooperate on
advantage of opportunities across the interest company research and meetings to reap the
rate curves at an issuer and sector level. We benefits of a combined research effort.
actively target liquidity premia that align with
the fund’s investment horizon.
Strategy 2020-2022 | Norges Bank Investment ManagementINVESTMENT STRATEGIES
Real asset investments Renewable energy infrastructure
Our real asset investments include listed and We seek to invest in unlisted renewable energy
unlisted real estate and renewable energy infrastructure to improve the overall risk-return
infrastructure assets. characteristics of the fund. We will focus on
Europe and North America given their tested
Listed and unlisted real estate regulatory frameworks and experience with
We will manage our investments in listed and private funding of infrastructure assets. Our
unlisted real estate under a combined strategy primary investment focus is wind and solar
and expect the combined real estate portfolio power generation assets. We will focus on
to approach 5 percent of the fund. Our strategy projects with low power price risk, stable
shall remain sufficiently flexible to allow us to cash flow and limited risk to the principal
exploit market disruptions and distress in real investment.
estate markets when they occur.
We will invest alongside high-quality partners
We aim for a sector-diversified portfolio with with proven operational experience. We favour
40 percent office, 20 percent retail, 20 percent equity investments but can invest in other parts
residential and 20 percent logistics exposure. of the capital structure. We prefer direct 15
Residential investments will primarily be made co-investments but will consider investing in
as listed investments, while logistics will renewable funds. The investment plan is flexible
primarily be unlisted investments. We will and does not have specific targets per year.
concentrate investments in New York City, We expect to build the portfolio gradually
Boston, Washington, San Francisco, London, and adjust the strategy as we gain experience.
Paris, Berlin and Tokyo, which have in common
a global footprint and long-term economic The operating model for unlisted renewable
attractiveness. Our investments in logistics energy infrastructure investments can build on
properties will, due to the nature of the current resources. Staff dedicated to renewable
business, be spread over a higher number of energy infrastructure is expected to be around
countries. 20 professionals. Prior to every investment,
commercial and sustainability risks will be
We invest directly with or indirectly via high- thoroughly evaluated through a robust process.
quality partners regarded as local experts,
or by ourselves in less resource-demanding
assets. We will invest in relatively new high-
quality buildings in a limited number of markets
characterised by transparent transaction
processes, robust corporate governance and
predictable regulatory and legal frameworks.
Redevelopment at our existing investments is
an integrated part of asset management
and is carried out together with our partners.
We will ensure that all our properties are
managed in a responsible and environmentally
sustainable manner.Strategy 2020-2022 | Norges Bank Investment Management
Management
strategy
Over the last 20 years, Norges Bank Investment Global operations
Management has built up an efficient, We have insourced our operational activities
international investment management in order to reduce overall operational risk and
organisation within the Norwegian central bank. improve efficiency and service quality. This
We operate in global investment markets and requires our organisation to be able to operate
believe that performance follows from in-depth around the clock, and we will therefore further
market understanding and an investment strengthen our operational capabilities in the
and result-oriented culture. Through the Singapore and New York offices. We expect that
establishment of common administrative more than half of our employees will be based at
support functions at Norges Bank, we aim our offices outside Oslo. We will strengthen our
to exploit synergies and economies of scale. international offices to allow for more efficient,
decentralised decision making.
Global and diverse organisation
Our presence in global markets is essential Global specialists
to execute our overall We will continue to look to global markets to
mandate and investment recruit and develop investment professionals
strategies. All our with deep specialist expertise, and also attract 17
Our presence investments are outside necessary capacity and talent for other
in global markets Norway, and our presence functions. As most of our investment mandates
as an international investor and business processes are global in nature,
is essential. must be welcomed and we encourage our organisation to have a global
trusted. Many of our mindset. To foster a truly global organisation,
investment decisions are made outside Oslo, we expect that around a third of all employees
and transactions are settled on a global basis. will have worked at more than one of our offices.
Closeness to markets Common values
Our company investments and role as owner Norges Bank’s core values of excellence,
require in-depth, specialised industry and innovation, integrity and team spirit underpin
company knowledge. The fund’s size and long- our culture and how we operate across all our
term perspective grant us access to company offices. We collaborate and share information
management, and our regional offices efficiently within our organisation consisting of 37
facilitate the thousands of company meetings nationalities through English as our common
we have each year. Proximity to market experts, working language. Our organisation is
standard setters, regulators and other grounded in trust, high ethical standards,
investment managers contributes to our a flat hierarchy and diversity. We aim to
overall market understanding and enables increase the share of women to exceed or
us to influence the development of financial match the industry average across all functions.
markets to the long-term benefit of the fund.Investment culture Risk willingness
The organisation is Investment management inherently involves
We promote centred on investment uncertainty and risk. We will foster a culture
transparency and decision making, which of controlled risk taking. We acknowledge that
welcome public requires a wide range of a high-performance culture views mistakes
information sources and also as an opportunity to improve and learn.
scrutiny of our results. inherently involves risk We recognise the role of the contrarian or
taking. We promote special talent in an investment management
transparency as this motivates our organisation organisation and will recruit and encourage
to be result-oriented and performance-driven, people who bring different approaches and
and we welcome public scrutiny of our results. challenge groupthink.
We emphasise high standards of integrity and
conduct. Performance-oriented
To ensure personal responsibility for measurable
Focused on investment decisions results, we believe in delegation of process
We will continue to develop specialist expertise accountability and investment decisions as
18 within our core business of investment well as clear reporting lines. We seek to avoid
management and encourage our employees unnecessary bureaucracy. We encourage all our
to build in-depth expertise in their area. employees to give and receive frank feedback
We aim to maximise the time our investment in order to improve as an organisation.
professionals spend on investment decisions.
All functions shall contribute to investment We will set clear targets and goals for our
performance. We will continuously evaluate employees and hone our performance
our business processes to ensure that they management practice. We will develop our
contribute to value framework and tools for people performance
creation. We target the measurement. Variable pay based on
share of investment performance has been an important tool to
All functions decision makers to be at create excess return and we will maintain
least half of all employees. and refine a compensation system that
shall contribute to
rewards performance.
investment Norges Bank Investment
performance. Management is a
knowledge organisation
operating in a highly information-intensive
industry. We will broaden our sources
of information and collect specialist
knowledge in new ways.
Strategy 2020-2022 | Norges Bank Investment ManagementMANAGEMENT STRATEGY
Efficient and adaptable operations We favour standard technology solutions
The efficiency and adaptability of our provided as a service and will correspondingly
organisation and operational processes are adapt our processes where necessary.
important contributors to our investment
management. We aim for an adaptable We expect the organisation dedicated to the
organisation where management of the fund to have reduced
teams have a high from 600 to 500 employees by the end of
degree of autonomy. the strategy period. This will be achieved
We continue We will continue to through more support functions being organised
to manage the be cost-conscious and centrally in the bank, by running programmes to
emphasise automated improve efficiency and by stringently prioritising
fund in a prudent and secure business activities according to value creation.
and efficient manner. processes.
Cost-conscious
Adaptable Our management objective is to achieve the
We believe there are multiple benefits from highest possible return after costs. All costs are
remaining a small, flexible and flat organisation. scrutinised in the context of improving investment 19
We will continue to build up self-sufficient, risk-return. We continue to manage the fund in
autonomous teams around our investment a prudent and efficient manner and through a
strategies and selected operational areas to cost-conscious organisation. We aim to keep total
ensure ownership and prioritisation. We will internal management costs below 0.05 percent
increasingly provide our technology services of assets under management, even with expected
through a self-service model and further develop changes in asset allocation. We expect to keep
our technology architecture to make it easier to management costs for external fund management
develop and integrate solutions. below 0.02 percent of assets under management.
We have insourced and automated many of Secure
our operational processes, and our technology Our risk management framework helps
services run in the cloud. We will continue to safeguard the fund’s assets. Our framework
focus on automating activities within our balances the need for control with the need for
operational processes to allow us to focus adaptation and change. The framework is built
resources on new development and change. on risk-based, efficient monitoring and control
with specialist expertise in high-risk areas. We
emphasise a clear delineation between first- and
second-line responsibilities and automation of
control activities. We will continue to build our
internal cybersecurity capabilities and further
develop our ability to detect, contain
and remedy security incidents.Strategy 2020-2022 | Norges Bank Investment Management
STRATEGY We safeguard the fund for future generations as prudently, efficiently and transparently as possible.
NORGES BANK INVESTMENT MANAGEMENT
Bankplassen 2, P.O. Box 1179 Sentrum, NO-0107 Oslo, Norway
T: +47 24 07 30 00, www.nbim.noYou can also read
