Greek PSI details hidden from Norway SWF
One of Europe’s biggest investors was kept in the dark about details of the Greek debt restructuring deal, according to comments from Yngve Slyngstad, chief executive officer of Norges Bank Investment Management (NBIM).
NBIM manages Norway’s Government Pension Fund Global, the so-called oil fund, which today reported a loss in its 2011 annual results. The fund made a negative return of NOK-86bn (€-11.4bn), or -2.5% as global stockmarkets collapsed during the latter half of the year.
Slyngstad today criticised the Greek debt restructuring deal, telling Dagens Næringsliv that NBIM had refused to voluntarily exchange its existing debt holdings because the deal abandoned key investment principles.
Firstly, it discriminated against bond holders, especially given the preferential treatment accorded the ECB. Secondly, the deal contained retroactive aspects through the so-called collective action clauses. The CACs were used to ensure that the PSI deal could claim a 96%-plus commitment from bondholders.
The oil fund reportedly had NOK6.1bn of Greek debt as of 8 March.
Overall the fund reported its equity investments fell -8.8% last year. Fixed income investments returned 7%, helped by rising prices on US, UK and German government bonds.
However, the fund continued to buy equities through the second half of 2011, Slyngstad said.
“We bought more than NOK150bn in European equities from the summer through the end of the year. Because more than half of the fund is invested in Europe, it is of great importance to us that authorities are successful in solving the considerable structural and monetary challenges faced by the euro countries.”
The fund’s worst-performing equity investment last year was French bank Société Générale. This was followed by Germany’s Daimler and the UK’s HSBC. The best performing stocks were Apple, GlaxoSmithKline and Exxon Mobil.
The effect of last year’s strong oil price was felt. The fund had capital inflows of NOK271bn (€36bn) from the Norwegian government, which was the highest since 2008. The asset allocation overall was 58.7% equities, 41% fixed income and 0.3% real estate as at the end of 2011.
Assets under external management fell to NOK145bn, a cut of 4.4% from NOK283bn.