Rare praise for active managers as two decades of returns have "exceeded expectations by a good margin", says NBIM

External asset managers have played an important role in fulfilling the oil fund’s mandate to get the highest possible returns over its 20-year history, Norges Bank Investment Management writes in a new report. The fund believes that performance-based fee schedules are a way to attract the best external managers.

Nicolai Tangen is displayed on a screen while being presented as the new head of the Government Pension Fund Global, also called the Oil Fund, as Head of Norges Bank Investment Management Yngve Slyngstad | Photo: Ntb Scanpix/Reuters/Ritzau Scanpix/via REUTERS / X02351

When Norges Bank Investment Management (NBIM) was set up in January 1998, the sovereign wealth fund was given a mandate to start investing in equities. Today, Norges Bank Investment Management has published a review of its 20-year history of investing with external managers.

"The overall results have exceeded our expectations by a good margin. In the first 20 years, the excess return has been 1.8 percent annually after costs or EUR 4 billion (NOK 47 billion)," says CEO of Norges Bank Investment Management Yngve Slyngstad, who will soon be replaced by hedge fund entreprenuer Nicolai Tangen.

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