In the process of revamping its portfolio, the Norwegian pension fund, Buskerud Fylkeskommunale Pensjonskasse, has dismissed a global equities manager and a fixed income manager.
As part of the overhaul, the pension fund has completely sold off its global equity portfolio and established a new bonds-held-to-maturity portfolio. As a result, the NOK3.1 billion (US$488 million) scheme’s total equity exposure has been reduced from 9% in 2007 to 2%, and Axa Rosenberg Investment Management has lost its equity mandate.
Elsewhere, the fund’s assets are expected to reduce by 70% from July this year as assets and liabilities will be transferred to a new separate corporate pension fund.
The creation of the new “held to maturity bonds” portfolio, which accounts for 76% of total assets, was established in preparation to transfer the municipality’s approximately 14,000 health workers’ pensions to a separate corporate pension fund, the Vestre Viken Pensjonskasse, which is currently being established by the Sykehuset Buskerud HF (the Buskerud Hospital).
The new pension fund is being created as a result of an unresolved disagreement between the county council and the health sector authorities regarding the municipality hospital employees’ pension arrangements. In the process Alfred Berg Asset Management has lost its fixed income mandate.
Considering that the majority of members are leaving, the pension fund said that a bonds-held-to-maturity portfolio is suitable investment, as it will help ensure “more stable and predictable returns in the future.”
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