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Norway's FTF makes internal changes

24 January 2014

Folketrygdfondet - which manages two Norwegian funds - aims to tap up new opportunities from treasury activities including collateral management and securities lending. Stephanie Baxter reports

Read more: Norway securities lending collateral management

FTF (Folketrygdfondet), which manages the Government Pension Fund Norway and Government Bond Fund, has undergone some internal restructuring in order to find new opportunities to generate excess returns, Global Investor/ISF has learned.
The fund manager’s treasury unit – which was previously a side activity inside the fixed income department - is now a standalone department alongside the equity and fixed income departments.
Before the restructuring the FTF's main focus was to create excess return from pure/classic equity and fixed income management. But it now wants to identify opportunities from within the treasury’s activities, which include collateral management, securities lending, liquidity management, in addition to currency and interest rate hedging.
"We now see that there might be more opportunities to create excess return by specializing in these side activities and hopefully find new activities/strategies that traditionally have not been seen as a core activity in either the equity or fixed income department," said Jørgen Krog Sæbø, chief treasurer, speaking exclusively to Global Investor/ISF.
"In addition we also want to create excess return by taking advantage of our distinct characteristics as a fund manager."
More attention will be given to the treasury’s activities now that it is a standalone department. It can create additional sources of excess returns that "can help us achieve our long term goals", he added.
As a result of the restructuring, Sæbø has taken on extra responsibilities. In addition to his new role as chief treasurer Sæbø will also be a part of the executive management of the company. He will take part in the overall strategic and operational management of the company, in addition to managing the treasury department. He will continue to be the main securities lending trader at FTF.
Sæbø recently told Global Investor/ISF that FTF was seeking to lend its high-quality bonds which will be in high demand for use at central counterparties. The demand for such instruments is likely to be an outcome of new European regulation requiring OTC derivatives to be centrally cleared.

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