As rises to the top go, this is pretty meteoric. Karsten August Kallevig, a Norwegian who graduated little more than 10 years ago from Massachusetts Institute of Technology in Boston, has just landed the role as head of real estate for Norges Bank Investment Management Banking (NBIM) in Oslo.
As real estate head, he will, in effect, be responsible for investing $22 billion in property on behalf of Norway’s Government Pension Fund Global, formerly known as the Norway Oil Fund and the second largest sovereign wealth fund in the world.
He has much the same job that Bill Schwab has at Abu Dhabi Investment Authority (ADIA), the world’s largest sovereign wealth fund. Schwab, 57, was appointed as global head of real estate last year to lead the team implementing ADIA’s global investment strategy. Kallevig is a much younger man than Schwab, but will nevertheless preside over implementing a similarly large programme.
Following recent Norwegian government approval, the real estate team at NBIM can allocate up to 5 percent of the Norwegian fund’s $330 billion of total assets. As previous statements by NBIM have made clear, the new allocation will be made through investments in unlisted real estate funds, as well as securities and direct property in well-developed markets and in traditional property types outside Norway.
So how did Kallevig, little-known outside of a small close-knit community of past and present private equity real estate colleagues, make it to such a lofty position?
Like so many other real estate veterans, Kallevig got his start at Goldman Sachs Real Estate Principal Investment Area as an intern, after graduating from MIT in 1998. Working for the bank’s Whitehall funds, he was recruited by Dolphin Capital Partners’ founder, Miltos Kambourides, a fellow MIT graduate, who was making a name for himself at the Whitehall team in Europe, working on innovative deals such as Trillium – which became the UK’s largest property outsourcing firm. He was screened by Markus Meijer, later the co-founder of private equity real estate Meyer Bergman, who was also at Whitehall in Europe in the 1990s. Kallevig’s stay at Whitehall, though, was a brief one. In 1999, the former head of Whitehall in Europe, Richard Georgi, left the business to start Soros Real Estate for legendary investor George Soros. Soros Real Estate was the forerunner to the global private equity real estate firm Georgi co-led with Richard Mulley, Grove International Partners. It was at Soros/Grove where Kallevig really cut his teeth.
Having joined Soros from its inception along with Kambourides, Kallevig went about working on some high-profile investments. One of them was Mapeley, a deal in 1999 that was led by Kambourides and in which Grove and Fortress Investment Group co-invested in an outsourcing company that went on to become the second largest real estate company in the UK. Mapeley was floated on the London Stock Exchange by Fortress in 2005 after Grove sold its 50 percent stake.
Kallevig also led the investment programme for serviced office company First Serviced Offices in 2003, which was sold to Morgan Stanley Real Estate in 2005. He also helped establish Giffels Management Russia, a logistics development platform, in 2006.
Four years ago, Kallevig was handed greater responsibility at Grove, relocating to Japan to oversee Grove’s portfolio in the country and building on the work already started by Grove partner, Michael Kandarakis.
While in Japan, Grove invested in private care provider HCM trading as Amica, and a start-up golf company Izanami.
Kallevig accepted the role as head of real estate at NBIM last month and will officially start on 1 September.
NBIM said in a statement Kallevig had extensive experience in international real estate investment, but declined to comment further.
Given he was only a graduate little more than 10 years ago, he should be proud of his achievement. Or as the motto of his Phi Sig fraternity at MIT goes: “Damn proud”.