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Norwegian pension investor says it disinvests if a fund's key people quit

When investing in a new fund, what we find is not a company but a team of portfolio managers behind the strategy, and if one or several people in that team were to leave that would definitely be a large red flag for us, says head of equities Norwegian pension fund Fellesordningen for AFP.

Photo: Janus Engel

Norwegian pension fund Fellesordningen for AFP (AFP) disinvests in funds in cases where key members of the team quits, reports IPE.com.

According to Frode Veiby, head of equities at the NOK 42bn (EUR 3.79bn) fund: "if a critical member of the team left, we would definitely disinvest quite fast."

Veiby, who comments on the issue at a recent webinar hosted by eVestment, also describes the pension fund's ongoing process of monitoring its external managers. He says that from AFP’s point of view, a typical warning sign in the metrics would be a dip in performance, or changes to the risk level, but that key personnel changes would also sound the alarm.

"When we are investing in a new fund, what we find is not a company but a team of portfolio managers behind the strategy, and if one or several people in that team were to leave that would definitely be a large red flag for us," he says.

Based in Lysaker, west of Oslo, AFP is a tariff-based pension scheme for the private sector which supplements the Norwegian state pension.

English Edit: Nielsine Nielsen

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