Norwegian pension providers should increase their exposure to domestic private equity to improve the country’s growth prospects, an in-depth government report has suggested.According to the productivity commission, the state should also recognise that regulation has acted as a barrier to competition in the provision of public sector pensions, with the report pointing to the departure of DNB and Storebrand, leaving only KLP to bid for local authority provision.The commission’s initial, 542-page report will now be examined by the government before a second paper puts forward concrete reform proposals on how the Norwegian economy should adapt as the role played by the oil industry declines.It noted that there had been a marked fall in interest from domestic private equity funds since 2007, when the industry agreed to 160 first commitments. The figure fell to just 15 a year by the end of 2013.The report said insurer DNB only had allocated 2% of its assets to unlisted equity “and thus had little significance as a source of financing of innovation and start-up operations”.It concluded that there was room for long-term investors, including pension providers, to increase their role in funding start-ups and small and medium enterprises (SMEs).Lending to SMEs has been hotly debated inside the European Union, with better access to funding for enterprises a cornerstone of Jean-Claude Juncker’s €315bn investment plan.However, respondents to a recent IPE survey remained uncertain about their role in meeting this funding shortfall.The commission also said the current predominance of KLP was an example of how regulation was acting as an entry barrier to competition in the local government pension market.It noted that both Storebrand and DNB had closed their local government businesses as the arrangement led to the current provider being favoured, even when a contract was up for tender.KLP saw its membership increase dramatically after both rivals withdrew from the market, with an inflow of 150,000 new savers last year.The report further argued that, as the level of oil production was predicted to be stable over the next decade, and the Government Pension Fund Global’s real return was expected to remain above its 4% target, the government would be able to divert more of the sovereign fund’s resources into domestic spending.Under the current budget rule, a government cannot spend more than 4% of the NOK6.7trn’s (€764bn) assets per year, with the figure based on an assumed investment return of 4%.The most recent budget earmarked spending of just under 3%, allowing the current and future governments to offset any decline in the oil industry’s output with higher spending.A 2013 report estimated that the petroleum industry would see its contribution to GDP halve by 2030 from a current level of 14%.However, the estimates were based around a long-term crude oil price of $94, compared with current levels between $50 and $60.For more on the Government Pension Fund Global’s approach to investments, see IPE’s recent interview with Norges Bank Investment Management chief executive Yngve Slyngstad
By Rory CarrollOAKLAND, California (Reuters) – The Golden State Warriors secured their second NBA championship in three seasons with a 129-120 Game Five win over the Cleveland Cavaliers on Monday, capping a near-perfect run through the playoffs.The Warriors, who beat Cleveland in the 2015 Finals only to lose to them last year after squandering a 3-1 series lead, went a record-setting 16-1 in the playoffs, their only loss coming in Game Four of the best-of-seven championship.The win provided redemption for the Warriors, who brought Kevin Durant over from the Oklahoma City Thunder last offseason to bolster their already high-powered offence.Durant, who lost in his only previous Finals appearance in 2012, led the way for the Warriors with 39 points and was relieved after feeling pressure to deliver prior to the game.“I couldn’t sleep for two days,” Durant, who was named the Finals MVP, said during an on-court interview. “I was anxious, I was jittery.“I just wanted to lay it all out there. I put in work. I just had to trust in it. We were really good tonight.”`Cavaliers forward LeBron James had a game-high 41 points and guard Kyrie Irving hit tough shots all night but defensive breakdowns by Cleveland led to easy baskets late in the game for the Warriors, igniting a deafening crowd.James said he had no reason to feel sorry for himself.“I left everything on the floor every game, all five games,” he said. “I have no reason to put my head down.”Warriors point guard Stephen Curry said the experience of losing last year’s Finals served them well this season.“We learned from everything we’ve been through,” Curry said during the trophy celebration.“To be back here and bring gold Larry (O’Brien trophy) back home, I’m just excited to be a part of this group and accomplish something special. I’m ready to do it again.”An unprecedented third straight Finals clash between the Warriors and Cavaliers was hyped as the ultimate championship rubber match and expected to be the antidote for a postseason that had little in the way of drama.But that idea fizzled fast when the Warriors opened with a pair of lopsided wins at home, fought back late to steal the next game in Cleveland and then, after dropping their first game of the postseason, closed out the series at home.In the end, the Cavaliers simply did not have enough top-class talent to topple the Warriors, even with four-time league MVP James doing all he could to keep his team in it.For James, already a three-time champion, the loss puts him in rare company as only the fourth player to come up short in five NBA Finals.Cleveland’s inability to give the Warriors much of a fight has already sparked talk that James, who left the team in 2010 for Miami before returning four years later, could consider another move during 2018 free agency.