In its new medium-term strategy plan released this morning, Norges Bank Investment Management (NBIM) outlined ways it intends to use active management to increase returns, including betting against the market.

Nicolai Tangen, chief executive officer of NBIM, which manages the NOK12.8tn (€1.2tn) Government Pension Fund Global (GPFG), said: “We have made a detailed plan which outlines how we intend to become the leading large investment fund in the world.”

In the 2023-2025 plan, the first of NBIM’s medium-term plans to be fully conceived under the Tangen’s leadership, the organisation said it would exploit its characteristics as a large and long-term investor to achieve the highest possible return in a responsible way, saying staff, technology, and processes were key to meeting its target.

NBIM said it would bolster its long-term mindset, be patient, and vary active risk as market conditions change – which it said allowed it to take advantage of the best opportunities when they arose.

“Variations in asset prices can be related to behavioural factors or leverage causing pro-cyclicality,” NBIM said, adding that long-term investors were well-positioned to take advantage of such variations.

“We will seek to buy when others want to sell and sell when others want to buy,” it said in the strategy plan.

“We will promote psychological safety so that our portfolio managers dare to be contrarian and avoid herd behaviour,” it said.

NBIM said it develop its investment simulator further to analyse investment decisions and systematically learn from its mistakes.

The asset manager cited some areas where it planned to do more of the work in-house, such as technology, where it would reduce reliance on consultants, and securities lending – activities it would look to insource to a greater degree in order to increase net income.

NBIM said it would use external managers in segments and markets where it believed they would enhance returns.

“In some markets, we also believe external managers will reduce the risk of our investments by avoiding certain companies with problematic business models and weak corporate governance,” NBIM said.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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