The world’s largest sovereign wealth fund (SWF), which owns an average of 2.5 percent of every listed European company, now aspires to become a more active investor.
Norway’s $760 bn oil fund, which generates income from its petroleum field, investments and taxes on oil and gas, has appointed a corporate governance advisory board and aims to take a more active role in the companies it invests in, the Financial Times reports, citing an interview with fund CEO Yngve Slyngstad.
The fund, officially known as the Government Pension Fund Global, will seek more involvement in naming directors and greater communication with chairmen while promoting long-term governance, Slyngstad tells the FT. The fund’s holdings include a two-thirds stake in Norwegian state oil company Statoil and a 9 percent stake in asset manager BlackRock, among others.
The new corporate governance advisory board ‘will be a sounding board for both long-term ownership matters and specific issues,’ Slyngstad says. ‘The important thing for us is that we wanted to sometimes have people with a broader, longer, more in-depth experience to complement what we [already] have in the organization.’
The fund has appointed economist and FT columnist John Kay, who wrote the influential Kay Review report on what he calls ‘short-termism’ in markets, as a member of the new advisory board, the newspaper says. Other appointees include Vodafone non-executive director Tony Watson and Peter Montagnon, former director of investment affairs at the Association of British Insurers.
The oil fund, which has quadrupled in size since 2005 and forecasts an additional 50 percent growth over the next seven years, says it particularly seeks greater involvement with companies in which it has an investment of $1 bn or more and is one of the top five investors.
The fund’s future faces political challenges in Norway, however, as the opposition Conservative Party seeks to split it up. Party leader Erna Solberg, who is ahead in the polls in her bid to become prime minister in next month’s elections, says the fund’s investments ‘might be too big to be handled by just one fund,’ according to an interview earlier this week with Bloomberg News.
