Norges Bank Investment Management is now without a head of real estate.
Karsten Kallevig, formerly chief investment officer of real estate at NBIM, has been appointed special advisor to chief executive Nicolai Tangen with a focus on real assets.
Kallevig, who has left NBIM’s leader group amid the transition, will not be replaced in his former role. “There will no longer be a CIO Real Estate,” a spokeswoman told PERE. Instead, NBIM – which manages the world’s largest sovereign wealth fund, the $1 trillion Government Pension Fund Global – will create the new role of chief real assets officer within the leader group, the spokeswoman said. In a statement, NBIM said it has embarked on “an ongoing internal process” to recruit the new officer.
The chief real assets officer, who will oversee investments in both real estate and unlisted renewable energy infrastructure at NBIM, will be part of the organization’s new leader group, which will be announced next month. In his new full-time role, Kallevig is expected to work closely with the new officer and to also continue working with the real estate team overall.
“I am pleased to have Karsten in a more strategic role. He has built a high-quality organization over the past decade and carries with him valuable investment experience which will benefit us going forward,” Tangen said in a statement.
Kallevig has served as head of real estate, albeit under different titles, since NBIM began investing in the asset class in 2010. He joined as global head of real estate asset strategies in September 2010 as one of only three people in the unlisted real estate team, just months before the sovereign wealth fund closed on its first property deal, the purchase of a 25 percent stake in a 150-year lease on The Crown Estate’s Regent Street portfolio in January 2011. That same year, he was appointed chief investment officer for real estate.
In July 2014, Norges Bank Real Estate Management was created as a separate entity from NBIM, and Kallevig was subsequently named CEO of the new unit. In February 2019, Norges Bank announced its decision to discontinue NBREM as a separate unit and reintegrate the real estate group into NBIM. Following the reintegration in April 2019, Kallevig once again became CIO for real estate at NBIM.
Kallevig’s new appointment marks the latest leadership transition at NBIM, following the departure this year of long-time CEO Yvnge Slyngstad. Tangen joined as NBIM’s new CEO this month.
Norway’s Ministry of Finance first discussed real estate investments for the GPFG in 2001, but no concrete proposals were made until 2006, when Norges Bank recommended a 10 percent allocation to real estate and infrastructure. It was not until November 2019, however, that the ministry allowed investments in unlisted renewable energy infrastructure as part of its environment-related mandates. NBIM has not yet made any investments in the latter strategy to date.
The sovereign wealth fund’s investments in real estate returned 10.4 percent in 2019 and made up 4.1 percent of the fund at year-end, according to its 2019 annual report. Unlisted real estate returned 6.8 percent, while listed real estate returned 20.9 percent.