Norway’s $880bn oil fund
urged to adopt new management model
But after increasing its assets by almost sevenfold in the past decade, Norway’s oil fund is facing increasing questions about whether its strategy is best suited to its size and long-term focus of investing for more than 100 years.
“The risk-taking of the fund should be raised,” said Andrew Ang, the US professor who was one of the authors of the report to the Norwegian government.
The report – co-authored by David Denison, former chief executive of the Canada Pension Plan Investment Board – also recommends that Norway adopt the so-called “opportunity cost model” of investing.
Such a model gives great discretion to the manager of the fund to own unlisted assets such as private equity and infrastructure as long as they beat a simple benchmark, usually consisting of equities and bonds. The CPPIB, which uses the model, has gone further than most in owning assets such as farmland and royalties
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In this BLOG we will look at pensions and their impact on what are called Public Private Partnerships or P3’s. IT will also deal with other pension matters, such as Defined Contribution Plans (DC) vs Defined Benefit (DB) PLANS, the weakness in private plans, the need for pension reform in public pensions to have shareholder rights, directorships and ethical investment directives and policies.
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