Skancke Consulting gives advice on the design and management of sovereign wealth funds and other long-term investment vehicles.

In a complex environment of macroeconomic challenges, financial market volatility and political change, Skancke Consulting helps clients build and protect wealth for future generations.

Martin_Skancke_01_LOW-RES Martin Skancke has worked on issues relevant for long-term investing for more than 20 years.
In the years 2006-2011, he built up and headed the Asset Management Department of the Norwegian Ministry of Finance. The department is responsible for the management of the Government Pension Fund, with a capital of over USD 800bn (end 2015). The responsibilities of the department include strategic asset allocation, evaluation and monitoring of operational managers, governance structure and legal framework and ethical guidelines and corporate governance.
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The key challenges for Sovereign Wealth Funds (SWFs) relate to the
interaction between three sets of issues:
Macroeconomic policies determine inflows and outflows for the SWF, and thus also the time horizon of the investments. The particular role of the SWF for macroeconomic policies may also have important implications for the appropriate levels of various kinds of risk for the SWF.
Investment strategy must build on a thorough understanding of financial markets and the relationship between various forms of risk and expected returns. But understanding financial markets is in itself not sufficient for setting the appropriate level of risk. Financial theory must be combined with an understanding of the role and objectives of the SWF and the risk tolerance of the ultimate owners to make meaningful recommendations on risk taking for an SWF.
A robust governance structure is needed to support the implementation of the chosen investment strategy. The governance structure must also address principal-agent problems inherent in delegated asset management. Good governance is also required to build legitimacy for macroeconomic policies which entail accumulation of substantial assets on government hands.
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Skancke Consulting adds value for its clients by taking an integrated approach to these three aspects of SWF management.