Article taken from: finance.yahoo.com
(Bloomberg Markets) — Norway’s clout in financial markets far outweighs its economy, which is about a 10th the size of Germany’s. The central bank’s $1 trillion investment fund plows the Nordic nation’s oil income into public securities and has become the biggest of its kind, owning about 1.4 percent of global stocks. Yngve Slyngstad, who grew up in Asker just outside Oslo and received multiple graduate degrees before devoting himself to finance, has been chief executive officer of Norges Bank Investment Management since 2008. The 56-year-old spoke to Bloomberg Markets about what makes a good money manager, how he learns about China’s economy, his concerns regarding information monopolies, and why all investing is active. He also explains his strategy for private equity and real estate and why his fund’s potential divestment from oil company stocks has nothing to do with climate change concerns. While the fund now aims to be 70 percent in equities, he foresees that increasing in the future. “With the larger funds you have a larger buffer,” he says. “We have a higher risk tolerance.”
BLOOMBERG MARKETS: When people look at your CV, one of the things that pops out is that you have four degrees—in politics, economics, law, and business. Why did you choose to take all those degrees when normal people make do with one or two, or maybe even none?
YNGVE SLYNGSTAD: Yes, and the best part of it is that most of my studies were actually in philosophy, and I never put that on my CV—that I have a degree in philosophy—at all. Why did I do all of these degrees? I would simply say that’s just a reflection of curiosity, a genuine desire to learn, and to read a lot of books. I don’t think you necessarily need to narrow down your profession, definitely not in investing. Investing is really something that is broad. It’s all about the future, so having an open mind probably was the most important thing for me.
BM: Was there a sense while you were getting all of these degrees that you were working toward becoming an investor? Or were you searching for something to do in life?
YS: I did law school first, and after finishing that I decided that was not going to be my profession. After studying and taking an MBA, I think finance was one of the options but not necessarily the only one.
BM: What was more interesting to you about finance than law?
YS: Finance is a privileged area to work in because it’s a gravitational field for everything that goes on in society—both that it’s so much about looking forward to what is really happening next and the fact that every dimension of how society is put together is reflected in the very prices of these securities. It’s a clear link to the underlying broad economy. So I always say you must never lose the real vision as you’re investing. It is not about paper. You’re investing in the actual real economic activity.
BM: As you think back on your career, was there one particular investor or philosophy that influenced you or inspired you?
YS: Not really. I had the privilege quite early, before I started working in the fund, to be assigned the Asian equity portfolio of Storebrand’s life insurance company. Most of the money there was sent out to external managers, and through that search process I saw that there are so many ways to look at this job.
We also were always open to [allowing] the people working here to pursue their own investment style, to use what is their best ability, whether that’s getting direct information from company management or whether that’s doing all the numbers.
BM: What do you think is different today in terms of managing money vs. how it was when you started off at the fund in 1998 or even earlier at Storebrand?
YS: It is still about information processing, but the amount of information that is available is of course increasing every year, and the frequency of that information is just getting faster and faster. You have to cut through that and find what is essential. With this kind of a skill set it is very difficult to see who has got it and who hasn’t got that ability, but I think it’s one way of distinguishing.
BM: Do you have a list in your mind of the essential things you’re looking for?
YS: We tend to shy away from the storytellers and look for those who are numbers-focused. But [we] also [look for] those who are very conscious about which decisions were made for which reasons and why they were wrong in some aspects and right in maybe others. It’s kind of an inquisitive process to be an investor, and that means that you have to find someone who’s got an inquisitive mind.