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External Management

The purpose of this policy is to provide principles and specific requirements related to outsourcing of investment management services to External Fund Managers.

Issued 1 July 2011
Last updated 15 September 2021


External Fund Manager ("EFM") is defined as a legal entity that performs investment management services on behalf of Norges Bank Investment Management (NBIM) in the name of Norges Bank. NBIM’s use of EFMs is based on the rationale that specialist external expertise will contribute to investment return. When awarding investment mandates to EFMs, NBIM shall ensure that the process for selection, contracting, monitoring and termination considers the various risks associated with the individual EFM and that risks identified are within NBIM’s risk tolerance level. NBIM shall have in place adequate and effective mechanisms to monitor and mitigate risks related to EFMs, both through contracts and control activities.

External fund management arrangement

  • The EFM shall invest on a discretionary basis in the name of Norges Bank or provide investment management services on an advisory basis.
  • Discretionary assets managed on behalf of Norges Bank shall be held in segregated accounts in Norges Bank's name at NBIM's appointed custodian.
  • Shareholder voting shall not be delegated.
  • Assets shall to the extent possible, be valued, accounted for and measured for performance in a manner consistent with internally managed assets.
  • Holdings and transaction data, which reflects the most recent investment activity shall be provided to NBIM on a best endeavours basis daily, subject to specific market limitations.
  • Necessary mechanisms, where reasonably achievable, shall be put in place to enable NBIM to execute termination in a timely manner and transfer the majority of the assets to internal accounts within one business day.


  • The EFM shall be regulated by local regulatory authorities and shall hold a valid investment license where this is required under local law.
  • The EFM shall be subject to a selection process including a risk based due diligence to mitigate fraud, including corruption prior to funding, with elements performed on-site.
  • Confirmation of selection and documentation on the chosen manager shall be kept on file.

Mandate and investment management agreement

  • An investment mandate shall be constructed to ensure compliance with related higher level investment mandates.
  • Standard practice shall be that contracts are based on English Law and the Investment Management Agreement (IMA) shall be implemented in accordance with Policy on Safeguarding of Legal Interest.
  • The IMA shall explicitly address Norges Bank's right to get access to review or audit the EFM.
  • The fee structure shall be constructed in such a way that based on the expected fee the majority of any excess return accrues to NBIM. Contractual provisions shall limit the total annual fee paid per external mandate.
  • The fee schedule shall be approved at least one reporting level above the person that negotiated the schedule.

Monitoring and review

  • The holdings and transactions generated by the EFM shall be subject to daily investment guideline monitoring.
  • The EFM shall provide an annual investment update.
  • The EFM shall be subject to periodic integrity due diligence checks and provide an annual compliance and operational risk questionnaire.
  • NBIM shall conduct periodic on-site reviews of the EFM with the frequency of the review determined based on the risk characteristics of the individual manager and incidents identified as a part of NBIM's internal control activities.

Download the policy (pdf)