Strategy 25: Close-out report

Norges Bank Investment Management manages the Government Pension Fund Global on behalf of the Norwegian people. The overall investment strategy for the fund is laid down in the management mandate from the Ministry of Finance. We manage the fund within the limits of this mandate. Our goal is to achieve the highest possible return after costs, given an acceptable level of risk. Responsible and long-term management ensure that the fund will benefit both current and future generations.

In November 2022, the Executive Board adopted a strategy plan for the period 2023-2025, Strategy 25. The plan was built on previous strategy plans and described our ambition and plan for the management of the fund. This report provides an account of how we have implemented Strategy 25 across its five pillars: Performance, Technology, Operational Robustness, People, and Communication.

The management of the fund during the strategy period took place against a challenging backdrop marked by geopolitical tensions, rapid technological advancement, and heightened market concentration. Our people, technology, and processes helped us navigate these complexities whilst advancing our strategic priorities and strengthening the organisation's capabilities. Our main achievements in the strategy period were:

• Our investment strategies for market exposure and security selection contributed positively to the fund’s excess return. Allocation strategies contributed negatively.
• We continued building a portfolio of unlisted infrastructure for renewable energy and made the first fund investment and the first investment in transmission of renewable energy. Towards the end of the strategy period, we made important changes to our real estate strategy.
• We updated our company expectations on human rights, sharpened our climate change expectations, and published new company expectations on consumer interests. We launched our 2030 Climate Action Plan.
• We launched a comprehensive AI strategy, established a dedicated AI team, and ensured all employees completed AI upskilling. We completed the transition from our old data platform to our cloud-based infrastructure.
• We settled 1,419,552 trades, while ensuring that our core operations remained stable with few operational incidents. Fully automated transactions have increased from 97.7 percent in 2022 to 98.1 percent in 2025.
• We strengthened the organisation from 572 employees in 2022 to 678 employees in 2025. This growth mainly reflects strengthened core processes within operations, IT security, and risk management.
• We have placed greater emphasis on explaining how the fund is invested to build knowledge about the fund both in Norway and internationally. We have topped the Global Pension Transparency Benchmark for three years in a row.

Performance

To achieve our goal of maximizing return, we aim to take advantage of the fund being large and long-term. We completed a long-term ownership initiative that examined how to further use our long investment horizon as a competitive advantage, resulting in concrete recommendations and actions on mind-set, mandates, relationship management, and incentive structures.

In Strategy 25, we emphasised building an investment culture where our portfolio managers dare to make decisions independent of consensus and avoid herd mentality. Building a long-term and contrarian investment culture is an ongoing process that takes time and will continue into the next strategy period. We promoted psychological safety through in-house Human and Team performance programmes. 50 percent of our employees have completed these programs. We also launched an investment mentoring programme to support junior talent building confidence to be contrarian and long-term. To encourage knowledge sharing, we launched a weekly virtual investment meeting open to all employees and a biennial internal Investment Summit.

Good investment decisions depend on good information and tools. We have further developed our Investment Simulator to enhance investment decisions, systematically learn from mistakes, and provide feedback to our portfolio managers. The Investment Simulator has been developed by adding performance analytics based on machine learning and new features for ESG integration. To further increase cost awareness, the simulator displays a cost estimate when portfolio managers place an order. We expanded the use of the simulator to additional investment areas such as external management. We have initiated the work to expand the simulator to the broad equity and fixed income portfolios. By the end of 2025, the Investment Simulator provided decision support to 159 equity portfolios.

During this strategy period, we have accelerated technology adoption to support our investment decisions. We increasingly integrated AI models into our investment processes. AI models are used to research companies and industries, test investment case hypothesis, prepare for company meetings, aggregate news, predict index changes, optimise dividend reinvestment, and generate signals for investment decisions.

The management of the fund should be cost-efficient. Low costs are not a goal in itself but cost-efficient management can make a significant contribution to the goal of highest possible return. Internal management costs as a share of assets under management has decreased from 3.0 basis points in 2022 to 2.3 basis points in 2025.

Investment strategies

We manage the fund close to the benchmark index set by the Ministry of Finance, but all our investment processes have active elements. This improves our ability to achieve the highest possible return and to be a responsible investor.

We use diversified investment strategies to manage the fund in a risk-controlled manner within the limits of our mandate. Our investment strategies are grouped into three main categories: market exposure, security selection, and allocation. Our investment strategies are tailored to the fund’s characteristics – a large fund with a long horizon. The main strategies complement each other in that they have different time horizons, are based on different analytical frameworks, and are expected to generate excess returns under different market conditions. We do not expect all strategies to generate excess returns at all times. The goal is that they should collectively generate excess returns over time. The three main strategies are pursued across equity, fixed income, and real assets.

During 2023-2025, the fund returned 14.77 per cent, or 7,087 billion kroner. Equity investments returned 19.6 per cent, fixed income returned 4.3 per cent, real estate returned -3.1 per cent, and unlisted renewable infrastructure returned 3.4 per cent. The fund’s market value increased by 8,839 billion kroner during the strategy period to 21,268 billion at the end of 2025.

In the strategy period, the fund's return has been 31 basis points lower than the benchmark index. Market exposure and security selection contributed positively to performance, whilst allocation decisions contributed negatively. Real estate investments returned less than the equities and bonds we sold to fund them and reduced the fund’s relative return. We also took selective allocation positions both to manage the fund's total risk profile and to exploit periods when we believed variations in asset prices were excessive. In recent years, we have been slightly underweight equities. This has reduced market risk in the fund compared to the benchmark index, but at same time contributed negatively to the fund’s excess returns. Since inception, the fund's annual return has been 24 basis points higher than the benchmark index.

A key limit in the management mandate is the limit for expected relative volatility of 1.25 percentage points. This limit regulates how much the return on the fund can be expected to deviate from the return on the benchmark index under normal market conditions. At the end of 2025, expected relative volatility was 0.37 percentage points, while for the strategy period relative volatility was 0.33 percentage points. Active risk-taking has been broadly stable over the strategy period. The expected relative volatility for the fund overall is lower than the sum of the three main strategies. This reflects, among other things, that the various strategies diversify the fund’s overall relative risk.

Equities

The fund’s benchmark index consists of 70 percent equities. Our equity management is based on two main strategies: market exposure and securities selection. These strategies enable us to achieve exposure to the broad equity market as expressed in our equity benchmark, while enhancing returns through fundamental research.

Market exposure

We manage the largest part of our equity portfolio internally through our market exposure strategy. We invest broadly in the companies in our benchmark but avoid mechanical replication to reduce costs. For a fund of our size, it is critical to manage and trade the portfolio efficiently.

• We improved our traders' ability to plan, source liquidity, and trade efficiently. We reorganised equity trading teams in 2023, completed an initiative on equity trading turnover, and incorporated large language models and machine learning in our processes to trade smarter and less. We increased our focus on block trading and strengthened local presence and relationships with brokers in markets we operate in. These efforts along with improved market conditions contributed to reducing our trading cost with an estimated 5.8 billion kroner over the strategy period. This represents a reduction in transaction costs of approximately 30 percent.
• We enhanced the fund’s return by following a diversified set of index refinement strategies. In the strategy period, we strengthened our regional enhanced indexing teams and cross-team collaboration, tailored investment approaches to regional market characteristics, and strengthened our risk management framework. We enhanced portfolio returns by taking active positions around corporate actions and capital market events.
• We diversified our lending strategy and added counterparties for better pricing and liquidity. We explored the potential benefits of insourcing our securities lending activities. Based on this review, we concluded to further develop our current managed agent model.

The strategy for market exposure contributed 6 basis points annually to the fund’s excess return over the strategy period.

Security selection

Our security selection strategy is based on in-depth company knowledge. As a large and long-term owner, we benefit from access to companies that few others can match. We continued to leverage this advantage to deepen our understanding of industry and company dynamics.

• By the end of 2025, we had 748 companies under internal coverage. We conducted more than 3,000 company meetings every year in the strategy period, most of them in person. We strengthened our relationships with companies through our Investor Relations Forum initiative, hosting a series of forums and roundtables across our global offices. We continued to partner with selected large institutional investors to host and attend buy-side led CEO conferences, in both the US and Europe. We earned recognition as 'Europe's Top Management Firm' by Institutional Investor in both 2023 and 2024.
• We initiated targeted investment mandates that took sector risk, built larger stakes in selected companies and explored contrarian opportunities. Most mandates continued to identify long-term winners within sectors using specialised expertise. We expanded our forensic accounting and behavioural analysis to reduce exposure to companies we expect to underperform.
• We continued to use external managers in segments and markets where we believe they will enhance returns. At the end of 2025, we managed 111 external mandates representing around 5 per cent of the fund. We awarded 11 new mandates in developed markets that have more flexibility to express negative views on companies in the benchmark index.  

The strategy for internal security selection contributed -2 basis points annually to the fund’s excess return over the strategy period. Our external security selection contributed 6 basis points annually to the fund’s excess return.

Fixed income

The fund’s benchmark index consists of 30 percent fixed income. The fund is invested in a broad range of bonds issued by governments and related institutions, as well as companies. The main purpose of our fixed income portfolio is to dampen fund volatility, provide liquidity, and harvest risk premia in the bond market. Fixed income management is mainly based on the strategies for market exposure and security selection, but we also invested selectively in segments outside the benchmark index as part of our allocation strategy.

• We fully automated parts of our fixed-income trading operations, enabling us to focus on high-value trades. Organisationally, we restructured leadership and combined functions into one trading department to enable better cross-collaboration and market coverage. We also established a new quantitative trading team to further streamline operations, automate key trading processes, and strengthen our data infrastructure.
• We expanded our fixed-income portfolio management toolkit, for example in derivatives usage, which combined with team stability and refined investment processes led us to set higher ambitions for excess return.
• We invested in selected segments outside the benchmark index, such as emerging market debt and government related bonds to diversify the fixed-income portfolio and harvest risk premia.
• We invested our corporate bond portfolio based on company research and utilised our company knowledge across equities and fixed income.

Fixed income management contributed 12 basis points annually to the fund’s excess return over the strategy period.

Real assets

Our real asset investments include listed and unlisted real estate and unlisted infrastructure for renewable energy. It has been a challenging period for our real estate investments due to higher interest rates and structural changes in the real estate market. We have continued to build a portfolio of unlisted infrastructure for renewable energy.

• On 1 January 2025, we integrated Real Assets and Equity Strategies into Active Strategies, consolidating all fundamental active investment functions. We established a dedicated sustainability team within unlisted real estate to implement our Net Zero strategy, share best practices, and improve data collection. In late 2024, we merged the unlisted renewable and listed energy teams to better capture opportunities and manage risks arising from the energy transition. The Tokyo office was closed in 2025 due to changes to our real estate strategy.
• We invested alongside high-quality partners with proven track-record and operational experience and have continued to broaden our network of real asset partnerships.
• At the end of 2025, 3.1 percent of the portfolio was invested in real estate, of which 1.7 percent in unlisted real estate and 1.4 percent in listed real estate. We used the flexibility in the combined strategy to access growing sectors and segments in a cost-efficient way. We announced 17 unlisted real estate acquisitions during the period, including logistics, mixed-use properties, student housing, and office. At the end of 2025, we announced a revised real estate strategy.
• At the end of 2025, 0.4 percent of the portfolio was invested in unlisted infrastructure for renewable energy. We continued building our unlisted renewable energy infrastructure portfolio focusing on high-quality wind and solar assets with major investments including two offshore wind construction projects in Denmark and Germany. We expanded the portfolio into transmission infrastructure and funds for renewable energy infrastructure to explore new markets and technologies.

Real asset management contributed -39 basis points annually to the fund’s excess return over the strategy period.

Responsible investments

The management mandate requires responsible investment to be an integral part of the management of the fund. Well-functioning markets, good corporate governance and sustainable business practices support the fund’s goal of highest possible return. Managing climate-related risks and opportunities is a key priority in our work. We launched our 2030 Climate action plan, focusing on engagement-led action to support and challenge our portfolio companies to transition their business models to net zero emissions by 2050.

We work at market level to engage with standard setters, markets participants, and exchanges to promote well-functioning and efficient markets.

• We continued engagement with regulators and standard setters on corporate governance and sustainability standards, corporate disclosures, responsible business conduct and climate and nature risks. We responded to 91 consultations.
• We updated our expectations on human rights providing additional details on expectations of companies operating in conflict-affected and high-risk areas. We sharpened our climate change expectations highlighting the need for companies to move from target setting to transition plans. We published new company expectations on consumer interests and guidance for food retailers on children's health and nutrition rights.
• We supported academic research on climate and nature financial risks. We increased our engagement through industry initiatives and with standard setters in emerging markets. We continued speaking at conferences and hosting biannual seminars with civil society organisations in Oslo and held similar events in London and Singapore.

We work at portfolio level to analyse financially material governance and sustainability information to strengthen performance and risk management.

• We further developed the principles for climate risk management and strengthened our capacity to estimate the long-term impacts of climate change on the fund. For the first time, we published nature risk disclosures building on the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD). We started publishing combined climate and nature disclosures and began to explore the intersection between climate and nature risk.
• We closed our 2025 Climate action plan. The share of the fund’s financed emissions covered by science-based net zero targets increased from 58 percent to 73 percent from 2022 to 2025. From 2019 to 2014, the unlisted real estate portfolio’s carbon emission intensity fell by 25 percent.
• We deployed AI tools to collect and analyse information about corporate and sustainability practices to better inform our ownership and risk management work. We improved the measurement and reporting of our engagement outcomes and strengthened our sustainability due diligence framework to better identify and assess portfolio companies’ exposure to conflict-affected and high-risk areas. We divested from 193 companies to reduce financial risk and generate excess return over time. We reversed 33 risk-based divestments.

We work at company level to promote long-term value creation and reduce risk in the companies we invest in and lend to. We set clear goals for all ownership activities and prioritise our largest holdings and companies with the most significant risks.  

• We held a total of 9,413 meetings with 2,029 companies on topics material to long-term value creation. At 5,311 meetings with 1,439 companies, governance and sustainability topics were discussed, covering 56 percent of our company meetings and 77 percent of the value of the equity portfolio. We engaged with 987 companies on climate-related topics, representing 75 percent of the fund’s financed emissions and 56 percent of the equity portfolio’s market value. Of these, 254 companies were engaged in specific net-zero dialogues.
• We voted at 33,499 shareholder meetings, casting votes on 334,302 proposals. We introduced mid-year voting reviews to highlight trends and key issues. We expanded our voting disclosure practices and started publishing our voting intentions through the Bloomberg voting platform. Research indicated that when we disclose our voting intentions, other shareholders follow. We filed our first climate-related shareholder proposals, while continuing to have constructive dialogue with the companies.
• We received the 2024 International Corporate Governance Network Global Stewardship Disclosure Award, recognising our commitment to meaningful stewardship transparency.

Technology

Technology is key to fulfilling our management assignment in a secure and robust way. Our cloud-based IT infrastructure provides flexibility and scalability. We have prioritised innovation and building our own solutions with our own people.

• We have completed the transition from our old data platform to our modern, cloud-based platform. This has eliminated the need to run two data warehouses in parallel reducing costs and time of managing two platforms.
• We developed and implemented order management and trading solutions tailored to our needs. We enhanced our internally built investment platform Polaris to support both equity and fixed income management and made good progress on consolidating portfolio management and trading functionality on a single platform. We modernised our risk management system for mandate monitoring and built a new tool that simulates forward benchmarks. We also modernised our network architecture and client platform making our technology more flexible for future needs.
• We launched an AI strategy and have completed a comprehensive AI transformation over the strategy period. We have established broad competency and adopted AI tools across the entire organisation, with self-reported efficiency gains exceeding 20 percent. We have implemented AI tools for all employees, established a dedicated AI team, a network of 71 internal AI ambassadors driving local competency building, conducted mandatory training programs, hackathons and technology days, and built our first AI-agents. We have entered into strategic partnerships with leading AI providers. The organisation has moved from exploration to systematic exploitation of AI. We have built internal competency and infrastructure that now enables us to deliver concrete business results through AI-driven solutions. The next phase focuses on strategic execution of high-value AI projects with measurable results, with particular emphasis on investment analysis, portfolio management and operational efficiency.
• We improved data management, quality, and accessibility through our new data warehouse strategy. Over 150 employees actively contribute to data development, with more than 70 per cent regularly using the platform.
• We have reduced bureaucracy in our processes through standardised developer processes, and an internal developer portal with guidance for coding and IT development, allowing for all types of development from “vibe-coders” to enterprise grade developers.
• We have reduced reliance on consultants by hiring and developing our own people, with more than 300 employees now contributing directly to IT development. This has made us more robust and reinforced the proud technology culture we strive for.

Operational robustness

Operational robustness is essential to safeguarding the fund’s assets and achieving our goal of highest possible return in a secure and cost-efficient way. We maintained comprehensive compliance and risk management frameworks where risks are identified, assessed, and integrated in our decision processes. Geopolitical uncertainty is contributing to a complex and challenging threat landscape. A strong compliance and risk management culture is critical for an effective control environment.

• Our core operations maintained stable performance. We settled 1,419,552 trades and participated in 182,586 corporate actions, restructurings, and related activities during the strategy period. This was done with high and increasing degree of automation and few operational incidents. The rate of fully automated transactions has increased from 97.7 percent in 2022 to 98.1 percent in 2025.
• We ensured that our processes are supported by technology that increases robustness and efficiency. We implemented new enterprise risk management and enterprise architecture tools and improved our overall architecture and documentation.
• We incorporated risk management and governance of AI into our framework to ensure responsible usage and risk awareness across the organisation.
• We strengthened teams that are highly dependent upon specialist skills and key individuals to improve operational robustness. We have restructured our business delivery teams in 2025 to better serve our investment priorities, strengthen our data capabilities, and build the foundation for AI integration.
• We strengthened our monitoring and management of geopolitical risk through enhanced scenario analysis, and stress testing capabilities. We publish the results of our stress tests to build public understanding of how much the fund’s value can fluctuate. We have also enhanced information sharing with the Norwegian Ministry of Finance and Ministry of Foreign Affairs.
• We transformed our approach to upgrading core systems, increasing upgrade frequency while reducing testing burden on business users. Streamlined processes improved system stability and accelerated access to new functionality.
• We implemented comprehensive monitoring and alerting across applications and systems, enabling rapid detection and response to issues impacting system stability or business operations.
• We strengthened security governance and embedded appropriate security controls in our processes. We further developed a threat intelligence function and strengthened cybersecurity capabilities through advanced monitoring tools for vulnerability detection and incident alerts. We expanded the security awareness program to include targeted training for high-risk roles.
• We strengthened business continuity and crisis management, including our IT disaster recovery capabilities. We systematically mapped critical process dependencies, conducted disaster recovery exercises for high-priority systems, and simplified our disaster recovery architecture.
• We further developed our training and awareness program to ensure adherence to laws, regulations, and best practices through interactive programs and practical examples.

People

People are the driving force behind our success and our most important resource. In this strategy period, we have sought to attract, develop, and retain the best people. We have grown the organisation in priority areas while remaining lean, flexible, and cost-efficient. We prioritised building a diverse and inclusive organisation and promoted a culture of trust and respect.

• Our workforce expanded from 572 employees in 2022 to 678 at the end of 2025, with an additional 22 employees in wholly owned management companies. This growth mainly reflected strengthened core processes within operations, IT security, and risk management. HR and Communications were transferred back into the organisation from the Central Bank, enhancing collaboration. We have also strengthened the renewable energy infrastructure team and expanded our graduate program.
• We are an international organisation, with approximately 40 percent of employees based outside Norway. We encouraged mobility across offices and teams to promote innovation and knowledge sharing. The number of international assignments more than doubled during the strategy period compared to 2020-2022. We have investments in around 70 countries and international presence is essential to fulfilling our assignment.
• We have supported lifelong learning through an extensive learning and development program. We established an Investment Academy to boost investment skills and collaboration, arranged workshops and talks on effective learning and lecture series on key topics such as geopolitics and energy transition. We launched learning platforms with digital learning content and have offered extensive AI upskill training ranging from fundamentals to advanced.
• Feedback is fundamental to our organisational culture. We launched a new performance management process for all employees to promote professional development and secure quality interaction between managers, teams, and employees. We have conducted feedback training for all employees using scenarios tailored to our organisation, and we have implemented 360-reviews, enabling both managers and employees to gather comprehensive feedback. Throughout the strategy period, we have seen increased maturity around feedback, allowing us to move the 360-reviews from anonymous to non-anonymous feedback in 2025.
• We strengthened our leadership capabilities across the fund, offering leader specific training and support. We have trained over 50 managers in the last 3 years. We continued with our biennial Leader Summit, with the latest focusing on ambition, performance, speed, and AI. Content was shared with all employees.
• We aim to be a diverse and inclusive organisation, where employees feel confident expressing opinions and learning from mistakes. We established a network for mental health first aiders across our offices and have explored mentorship relationships.
• Applications for positions increased significantly for our graduate and summer internships. In 2024, we received 1,142 graduate and 4,347 summer internship applications, up from 664 and 888 in 2022. Our 2025 internship program selected 40 individuals from over 4,300 applicants. We welcome new graduate classes each year, with programs featuring three rotations including time in our global offices.
• Our employee engagement surveys showed high satisfaction throughout the strategy period. Turnover remained low, ranging from approximately 4 percent to 7 percent during the period.
• NBIM received the HR Norway Competency Prize 2025 for our employee development approach, recognizing our commitment to fostering a learning culture. We are ranked number 3 as Most Attractive Employer amongst Norwegian business students in the Universum Talent Survey. We strengthened relationships with educational institutions through various initiatives, including NBIM Teach lectures at educational institutions.

Communication

Managing the fund on behalf of the Norwegian people requires transparency. Transparency builds knowledge and trust, both in Norway and internationally. To strengthen this foundation, we increased our public visibility and improved our communication channels to better reach the Norwegian people and global stakeholders. We placed greater emphasis on explaining how the fund is invested, how we use technology, and how we manage investment risk. We also enhanced our internal communication to better connect employees across our offices.

• We strengthened our relationships with Norwegian and international media to promote better understanding of the fund and ensure accurate coverage. In Spring 2025, the documentary series Oljefondet – på innsiden aired on Norwegian television, offering a behind-the-scenes look at how the fund is managed and the people behind it.
• We expanded the role of subject-matter experts as spokespeople across conferences, universities and specialised forums. The number of internal experts speaking externally more than doubled during the strategy period. We launched the Investment Conference to strengthen ties with the Norwegian asset management community. Our podcast In Good Company remained a key platform for knowledge-sharing – with 148 episodes released and close to 12 million downloads in total.
• We strengthened our efforts to raise awareness and build knowledge among younger audiences. To reach this group more effectively, we launched new Instagram and YouTube channels to facilitate dialogue and make the fund more accessible. NBIM’s official social media channels reached over 200,000 followers. We also supported the establishment of the Women’s Investment Club at universities and colleges in Norway and abroad – to inspire female students to pursue careers in finance. Our student outreach grew significantly, with 72 speakers participating at 384 events in 2025, up from 30 speakers at 166 events in 2022.
• We strengthened internal communication to support strategy execution, culture and collaboration across teams and time zones. We introduced new tools and platforms, including an internal social media network, to improve two-way communication and access to relevant updates. Global town halls now rotate between offices and are attended by nearly all employees, fostering connection and shared understanding. We also improved leadership communication and launched a real-time communication dashboard, enabling better alignment and prioritisation across the organisation.
• We redesigned our website in 2024 to improve navigation, usability and digital accessibility. In 2025, we followed up with an upgraded version of our holdings overview – with improved functionality, a refreshed visual layout and a stronger technical foundation. From 2024, the fund’s holdings have been updated twice a year. The aim has been to make it easier to explore and understand what the fund is, how it is managed, and how it is invested.
• We were awarded the Global Pension Transparency Benchmark three consecutive years, recognizing our efforts to be the most transparent investment fund in the world. In both 2024 and 2025, we achieved perfect scores across all categories: performance, costs, governance and responsible investing.