IPE Nordic Briefing: ​Norway’s SWF calls for lift of general freeze on Russian assets

Norway’s vast sovereign wealth fund has finally asked the government to lift the general freeze on its Russian assets, allowing it to try to recoup some value from what was once a €2bn allocation to the country.

The fund’s manager, Norges Bank Investment Management (NBIM) says an approach where it could make “isolated transactions if and when divestment opportunities arise” is currently the only way for it to sell off parts of the Russian portfolio, which lost most of its value after Russia’s invasion of Ukraine in 2022 and the immediate sanctions then imposed.

However, NBIM’s letter to the Norwegian finance ministry on the issue has revealed the value of the Government Pension Fund Global’s Russian investments has bounced back substantially since their low point – due to the accumulation of dividends in the account of NBIM’s custodian Citibank with the Russian National Settlement Depository.

Meanwhile in Iceland, pension funds have won some long-awaited clarity on the legal situation around provisions for changed life expectancy. The country’s second-largest pension fund, the Pension Fund of Commerce (Lífeyrissjóður verzlunarmanna, LV), received a ruling from the Supreme Court confirming it was right regarding the basis it used for a huge increase in liabilities. 

The court thereby rejected a claim to annul amendments to certain provisions of the ISK1.29trn (€8.85bn) pension fund’s articles of association.

The ruling set a precedent for other pension funds, after the institutions had been in a state of uncertainty following differences of opinion among actuaries in Iceland on how to implement new mortality and longevity predictions published back in 2021.

Separately, Sweden’s financial watchdog called the main occupational pension providers in to get to grips with problems linked to the huge increase in pension transfers happening in recent years.

Daniel Barr, director general of the Swedish Financial Supervision Authority (FSA), said occupational pensions should only be moved if in consumers’ interests, and that after hearing views from the industry on the matter, his agency would follow things up in its ongoing supervision.

Municipal pension fund KPA Pension added its perspective to the debate, saying it estimated two-thirds of people moving their workplace pension savings schemes were unaware they were losing their guarantee in the process. 

Most pension transfers involved a shift away from a default occupational pension provider to major banks, it said.

Items to note:

• Many Nordic pension funds scooped prizes in the IPE Awards 2024, presented in Prague last week, including Sweden’s AP4 – with the buffer fund’s CEO Niklas Ekvall taking no fewer than six trophies home to Stockholm. 
• IPE’s Nordic Report is out now in the December issue of the magazine, including features on Danish pension fund approaches to venture capital, mixed opinions on the proposed AP funds mergers as well an interview with leaders of the Swedish Fund Selection Agency. 

Rachel Fixsen

Nordic Correspondent