Norwegian Pension Law Restricts Alts
Norwegian Pension Law Restricts Alts
05-30-2008 | Source: Global Money Management
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Norway’s Aker Pensjonskasse has been forced to shelve plans to invest more capital in alternatives because of a new Norwegian pension law, MandateWire reports. To adjust the portfolio, the scheme upped its fixed-income allocation, but remains committed to its alternatives investments in the future.
Berit Morck, pension fund manager at Aker, said that the country has “very strict regulations now from Jan. 1, which makes it very complicated with the alternative investments. We can only have 1% of our liabilities towards the pensioners in one investment, so one hedge fund and so on. We had to split the portfolio.” He added that the scheme plans to invest in hedge funds and private equity in the future.
Commenting on the pension law, Morck thinks that “it’s quite a limitation. It makes no sense really. 1% for one fund is a very small amount. Maybe they could have increased the limit to 7%, but not have the limitation that we have to have seven different investments.”
Another Norwegian pension fund, Det Norske Veritas Pensjonskasse, is looking to investment more in “other” alternatives to complement the 5% it has in
Berit Morck, pension fund manager at Aker, said that the country has “very strict regulations now from Jan. 1, which makes it very complicated with the alternative investments. We can only have 1% of our liabilities towards the pensioners in one investment, so one hedge fund and so on. We had to split the portfolio.” He added that the scheme plans to invest in hedge funds and private equity in the future.
Commenting on the pension law, Morck thinks that “it’s quite a limitation. It makes no sense really. 1% for one fund is a very small amount. Maybe they could have increased the limit to 7%, but not have the limitation that we have to have seven different investments.”
Another Norwegian pension fund, Det Norske Veritas Pensjonskasse, is looking to investment more in “other” alternatives to complement the 5% it has in
hedge funds. However, the scheme cannot make any changes because of the new regulation. Corporate Treasurer Tore Eilertsem thinks that “most of the pension funds in Norway will [say] that this is a small disappointment that there was no larger increase in this quota.”
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