Press release | Date: 03/09/2021 | Ministry of Finance| No: 61/2021
International developments and developments in global financial markets may be of importance for understanding risk in the management of the Government Pension Fund Global (GPFG). Today, a Public Committee has been appointed to review which developments may be of relevance in the years to come and possible implications for the management of the Fund.
"The GPFG has been a success. This applies both to the investment strategy, the management, and the performance. Well-founded choices and broad political consensus have ensured stable and predictable management of the Fund, which has proven important for Norway and the Norwegian welfare. In May, the Fund celebrated its 25th anniversary. The environment in which the GPFG operates may however become more demanding the next 25 years than in the 25 years we have put behind us. In line with international developments and developments in the global financial markets, the management of the Fund should be reviewed continuously. Any adjustments should be based on professional advice and thorough assessments", says the Minister of Finance Jan Tore Sanner (Conservative party).
The GPFG investments are diversified across markets, sectors, companies, and financial instruments globally. International developments in and developments in the global financial markets will be of relevance for the Fund market value, and thus also for the scope for transfers to the Budget.
"We need to consider how to manage both what we cannot control (global changes), and how we manage what we can do something about (strategy and governance). The Committee's work involves both dimensions. The Committee shall not only examine the outside world, but also assess what it means for the GPFG", says Minister of Finance Sanner.
The Committee will be chaired by Ulf Sverdrup, director at NUPI (the Norwegian Institute of International Affairs).
"For many years the development in the global economy has been characterised by closer economic integration and technological progress, which has been beneficial for the GPFG. From being an oil nation, Norway has become a global investor. The result of this is that the global financial markets and international relations have become increasingly important for Norwegian welfare. We are now perhaps facing transition times. The Committee is asked to assess how developments in international markets, governance, and international politics may affect the GPFG. This is a demanding assignment. The Committee members however are highly competent, and we are looking forward to taking on the task", says Ulf Sverdrup, chair of the Committee.
- Ulf Sverdrup, Director, Norwegian Institute of International Affairs (NUPI)
- Harald Magnus Andreassen, Chief Economist, SpareBank 1 Markets
- Olav Chen, Head of Allocation and Global Fixed Income, Storebrand
- Alexandra Bech Gjørv, CEO, SINTEF
- Jon Gunnar Pedersen, Partner, Arctic Securities
- Helge Seland, Ambassador, The Norwegian Permanent Mission to the Council of Europe in Strasbourg
- Inger Stensaker, Professor, Norwegian School of Economics
- Olaug Svarva, Chair of the Board, DNB and Norfund
- Jonas Tallberg, Professor, Stockholm University
- Karin Thorburn, Professor, Norwegian School of Economics
- Astrid Undheim, Executive Director, Sparebank1 SMN
The Committee’s secretary will be headed by Thomas Ekeli, who was secretary to the expert group that recently presented the report "Climate risk and the Government Pension Fund Global".
The Committee’s shall, inter alia, examine:
- How and to what extent developments internationally and in the financial markets, including key drivers, may affect returns and risk.
- The extent to which such developments may have an impact on the investment strategy and the governance of the Fund.
- Whether the current model where the fund management organisation remains within Norges Bank would be the most suitable also going forward or whether new challenges suggest a different model.
The Committee shall not propose specific changes in the GPFG’s investment strategy. The fiscal policy guidelines also fall outside the scope of the mandate.
Organisations etc. that would like to provide input to the Committee’s work may submit it in form of a short, written note to firstname.lastname@example.org, labelled «Committee on long-term perspectives for the GPFG» within 15 November 2021.
The Committee shall submit its report by 1 October 2022.