NORWAY - Norges Bank Investment Management has funded seven new external mandates for the NOK1.5trn (e187.5bn) Government Pension Fund - Global - in the second quarter.
Three of the new mandates were awarded in the fixed income space and the other four in equities, both of which registered negative returns of -0.39% and -3.31% respectively in Q2.
Putnam Advisory Company won two fixed income mandates - a global mandate and one for US specialist management. Insight Investment will be responsible for the fund’s European specialist management.
Regarding its equity portfolio, the fund assigned regional mandates to AllianceBernstein, T. Rowe Price and GLG Partners. Janus Capital was awarded a sector mandate.
Global registered a total return of -1.55% over Q2. This was attributed to a sharp drop in equity prices in May.
On the other hand, its market value increased by NOK21.1bn with NOK69.6bn in new capital being transferred to the fund.
The market value of the pension fund’s fixed income and equity portfolios increased by NOK18.1bn and NOK3bn respectively. As a result the fixed income portfolio was worth NOK895.1bn while the equity portion was valued at NOK609bn.
Around 10% of the fixed income portfolio and just under 40% of the equity portfolio were managed externally. According to NBIM, awarding mandates to external managers proved to be the right decision.
The excess return from external managers has clearly exceeded the additional costs, it said.
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