GOVERNMENT PENSION FUND GLOBAL:
EXPERIENCES AND ORGANISATION
DEPUTY GOVERNOR
EGIL MATSEN
Oslo, 27 October 2017A large fund– 8 000 billion
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
1998 2001 2004 2007 2010 2013 2016
GPFG. In billions of NOK
Source: Norges Bank
2
A large fund
GPFG. In billions of NOK
1)1) At June 30 2017
Source: Norges Bank 3
-1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
1998 2001 2004 2007 2010 2013 2016
Krone exchange rate
Return
Net inflows
1 076 bn.
3 622 bn.
3 323 bn.
4
Governance structure
The Storting
Ministry of Finance
The Executive Board – Norges Bank
Norges Bank Investment Management (NBIM)
Delegation ofpowers and responsibilities
Reporting of results and risk
Return on the GPFG and benchmark index
0 50 100 150 200 250 300 350
1998 2001 2004 2007 2010 2013 2016
GPFG¹
Benchmark index²
Index
1) Equities, fixed income and real estate. 2) Benchmark index for equities and fixed income investments 3) At June 30 2017
Sources: Bloomberg Barclays Indices, FTSE and Norges Bank 5
Asset allocation – GPFG, CPPIB and GIC
GPFG CPPIB GIC
Public equity 65 37 44
Bonds 32 22 40
Real estate 3 13 7
Private equity 18 9
Infrastructure 10
Sources: CCPIB Annual Report 2017, GIC Report 2016/2017, Norges Bank
6
Evolution of strategy and governance structure over time
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
1996 1999 2002 2005 2008 2011 2014 2017
40%
equities1) Government bonds only
60%
equities1)
70%
equities1) First real estate
investment All emerging
equity markets1)
Ethical guidelines Bonds - extended
investment universe1) NBIM is
established
Two deputy governors
Separate unit for real estate investments
GPFG. In billions of NOK
1) Timing of strategy decisions 2) FTSE Global All Cap
Source: Norges Bank 7
Internal audit fuction Audit Committee
External auditor
Risk and Investment Committee Ownership Committee
Important considerations for the future
Objective of investment management
– avoid multiple objectives
Division of responsibility in the governance model
– clear division of roles and responsibilities
Board composition
– expertise in finance and investment management and a clear understanding of the fund’s role in the Norwegian economy and Norway’s economic policy
Cost-effective investment management
– a single manager generates economies of scale
8
0 1000 2000 3000 4000 5000 6000 7000
1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
The Alberta Heritage Savings Trust Fund
Source: The Alberta Heritage Savings Trust Fund Annual Report 2016-2017 and Statistics Canada
