One of the biggest asset managers in the world, Petter Johnsen, is one many people have never heard of unlike Bill Gross or John Paulson. Johnsen, who is employed by Norges Bank Investment Management, which manages the world’s largest sovereign wealth fund for Norway’s central bank and has assets of $840 billion, is the Chief Investment Officer for Equities. His department earned 63.6 percent of the oil fund as of the end of the 2013 third quarter.
Johnsen uses a four-team approach to employees in his staff. Of those four teams, three of them consist of portfolio managers whose job it is to research specific industries, review special projects and understand general investments. These teams are known as “sector strategy,” and include approximately 20 members who bring specialized expertise to the fund. Each manager is given specialized mandates related to banks, insurers or telecom companies, and each portfolio has between 10 and 15 positions.
One of the reasons that Johnsen says the group is so successful is that the team members are not traditional fund managers who are simply trying to market products to investors. He feels that the advantage his group has is that the mandates given to the portfolio managers are not necessarily stand-alone products, but are part of a larger picture that focuses on what the portfolio provides in total. Johnsen, who is actively recruiting members for the team, hopes to more than double the size in the next few years. He seeks those who are willing to focus 100 percent on investing with no other priorities using time or resources of the team members. Johnsen says that those on his team often remark that it is an “exciting place to work.”
The second team under Johnsen is known as the Capital Strategies Group, and consists of approximately 20 portfolio managers who have access to global equities as a starting point in their investment strategies. Using extensive research, the managers take bigger positions than many investment managers. Although Johnsen does not reveal specific details on the types of investments made by the Capital Strategies team, he says that the focus is on in-depth projects using a more opportunistic method with long-term results. It is the Capital Strategies Group that takes the lead when the oil fund becomes what is known as an anchor investor. The team did so recently in Asia, becoming anchor investors in several Chinese industries.
Asset Strategy Group
The third team in the investment group is known as the Asset Strategy Group, consisting of an additional 20 portfolio managers who are responsible for the core portfolio. This group focuses on benchmarks given by Norway’s Ministry of Finance, but also uses an element of active management as well. Johnsen says that the stakes for this portion of the fund are high, making it difficult to follow quarterly changes precisely.
The final team in the investment group consists of traders, with approximately 16 stock team members. The daily volumes are similar to those found in the Oslo Stock Exchange, so it is critical that the trading be handled properly. Many of those on this team are regional specialists, while others have more specific skills, such as dealing with small caps.
Size and Responsibility
One issue facing the fund is size, as just before last year’s elections, government officials in the Centre-Right government in Norway suggested that the oil fund had grown too large and should be divided. Although dividing the fund did not occur, growth has been significant, growing to 12 times its worth over the past decade. Johnsen understands that the size of the fund can be a challenge, but views it as an opportunity. He believes that increasing the investment over the next few years could lead to the fund becoming a valuation tool. Responsibility is another factor facing the fund over the next few years. Yngve Slyngstad, Chief Executive of the oil fund says that NBIM must be a more active investor, discussing matters in depth with the chairman of other companies.
Johnsen says that the fund meets with companies throughout the year, holding as many as 2,500 dialogs annually. The fund also tries to attend annual meetings whenever possible. He believes the fund is more than capable of handling the large assets responsibly by using the fund characteristics in a greater capacity.
1999 Economics with a major in finance in NHH, Norwegian Business School
1999 Morgan Stanley, Research equity
2000 Merrill Lynch, Research equity analyst
2003 NBIM, portfolio manager
2010 NBIM, global head of sector strategies
2011 NBIM, CIO for equities
Ownership Norwegian people through the ministry of finance