Norwegian SWF giant turns activist for first time

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The world’s second largest sovereign wealth fund has taken its first ever steps into active shareholder participation, according to its latest quarterly results.

Norges Bank Investment Management (NBIM), which operates the $750 billion Norwegian Government Pension Fund Global, said it intends to take a more involved role in companies which it has a substantial share of the voting rights.

Outlining its plans in its second quarter 2013 results, NBIM said it would present expectations in terms of corporate governance and management to companies.

It has also formed a corporate advisory board to help aid this push.

NBIM has taken two steps to engage with companies, the first of which is to file shareholder proposals to improve board accountability in several companies in the United States.

In addition, for the first time ever, NBIM has exercised its right to put forward a representative to a company’s nomination committee. This has seen it name NBIM CEO Yngve Slyngstad as a representative on the committee of Volvo.

Commenting on the decision, NBIM said: ‘This is the first time the fund has exercised its right to sit on a company’s nomination committee and reflects our long-term goal of closer contact with companies’ boards to safeguard the fund’s values.’

Looking at the performance of the sovereign wealth fund, NBIM reported a total return of 5.45% over the first three months of 2013. This was followed by a 0.1% return in the second quarter of 2013.

NBIM opted to retain the number of externally-run mandates as it had at the end of 2012. At present, 3.9% of the fund is managed externally, which amounts to $290 billion of its equity investments and $35 billion of its fixed income investments.