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Norges Bank Appoints New CIO for Asset Strategies

Geir Oivind Nygard will oversee the bulk of the world’s largest sovereign wealth fund’s assets.

  • Imogen Rose-Smith

Norges Bank Investment Management, which manages the $870 billion Government Pension Fund of Norway, has named Geir Oivind Nygard to the role of CIO for Asset Strategies.

Nygard, who previously served as global head of portfolio management for the Norwegian bank, was named interim CIO in December after the departure of previous investment head Oyvind Schanke.

Norway's Government Pension Fund Global is the world’s largest sovereign wealth fund. In his new role Nygard will have broad responsibility for the fund’s fixed income and equities strategies. Before heading up portfolio management, Nygard, who reports to CEO Yngve Slyngstad, was global head of equity asset strategies. Nygard joined the bank in 2007, having previously worked for Arkwright Consulting.

This December Norges Bank advised the Ministry of Finance — which has ultimate oversight for the way the government pension fund is managed — that the government pension plan should increase its equity allocation to 75 percent from 60 percent, based on forward-looking return expectations and other factors. In a December 1 letter to the Ministry of Finance recommending the change, the bank stated that “the expected average annual real return on a portfolio with 40 percent bonds and 60 percent equities is estimated at 2.1 percent over 10 years and 2.6 percent over 30 years. If the equity allocation is increased to 75 percent, the expected average annual real return over 10 years increases to 2.5 percent and to 3.5 percent over 30 years,” although the investment manager recognizes that a higher allocation to equities would result in more volatility. The manager expects the transition to a new 75 percent equity allocation to take place over time.

In November Schanke was named CIO of Skagen Funds, the $9 billion Norwegian mutual fund company.