Expert group assessing unlisted equity investments in the GPFG

The Ministry of Finance has appointed an expert group as a part of the work to assess whether the Government Pension Fund Global (GPFG) should be allowed to invest in equity in unlisted companies. The expert group is comprised of associate professor Trond Døskeland at the Norwegian School of Economics and professor Per Strömberg at the Stockholm School of Economics.

Norges Bank, the operational manager of the GPFG, is as of today allowed to invest the Fund in unlisted real estate and in unlisted companies where the company board has expressed an intention to seek listing on a regulated and recognized marketplace. Norges Bank is not permitted to invest the GPFG in unlisted companies on a general basis. In the annual Report on the management of the Government Pension Fund submitted to Parliament on 31 March 2017, the Ministry notified of plans to assess whether Norges Bank should be allowed to invest the GPFG in unlisted companies on a more general basis. The aim is to present an assessment the Report to be submitted to Parliament in the spring of 2018.

The expert group shall describe and assess the investable market for unlisted equity for the GPFG, and assess expected returns, risks and costs for such investments. A key question is to which extent equity investments in unlisted companies represent systematic different investment opportunities compared to listed companies and companies seeking public listing. In the opposite case, expected risk and return will mainly depend on the manager’s skills in selecting companies and specific investments. The group is asked to assess whether Norges Bank has or can be expected to develop such skills.

The expert group is also asked to assess whether certain parts of the investable market for unlisted equity may be more appropriate for the GPFG than others, as well as possible requirements the Ministry of Finance should impose for such investments.

The assessment will not include investments in unlisted infrastructure.

The expert group is to submit its report by December 2017.

The mandate for the expert group

As part of the work to assess investments in unlisted equity in the GPFG, the Ministry of Finance has also asked for advice and assessments from Norges Bank in a letter of 29 June 2017.

The letter to Norges Bank (in Norwegian)

More on the members of the expert group

Trond Døskeland is an associate professor at the Norwegian School of Economics. He received his PhD from the same institution in 2007. His research interests include asset management, household finance, behavioral economics, responsible investments and risk management. He has published in a variety of academic journals, including the Journal of Finance, Management Science and the Journal of Banking and Finance. He has also written the household finance book “Personlig finans”. Døskeland is a member of the board at the Financial Market Fund and a deputy board member of  Folketrygdfondet, the operational manager of the Government Pension Fund Norway.

Per Strömberg is a professor at the Stockholm School of Economics and adjunct professor of Finance at University of Chicago, Booth School of Business. He received his PhD from Carnegie Mellon University in 1997. Strömberg’s research interests include bankruptcy and private equity finance. His work has been published in top academic journals in economics and finance, and has been acknowledged by several best article prizes. Strömberg chairs the prize committee of the Sveriges Riksbank Economics Prize in the Memory of Alfred Nobel, and he is a board member of the Sixth AP Fund.