The Price Of SWF Investment: Deteriorating Firm Performance?

In January, the Norwegian Government Pension Fund was accused by critics of gambling Norway's wealth through its active investment strategy. In 2008, it lost NKR633bn (US$111bn), NKR80bn of which was ascribed to its active management. Given that Norway's sovereign wealth fund (SWF) is one of a handful of SWFs with an active investment strategy (others are Singapore's Temasek and the UAE's Abu Dhabi Investment Authority), in the hubristic belief that it can beat the market, this has left many analysts praising the benefits of a passive strategy. If only things were that simple. Recent research by Bortolotti, Fotak, Megginson &

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