presentation by harald magne glomdal

Faith Consistent Investing

New investments for the Faiths: Opportunities or sources of

conflict?

Agenda

• About Opplysningsvesenets fond• The SRI guidelines• The investment policy• Society Improving investing• Howe Faith Consistent are the investing?• Appendix

About Opplysningsvesenets fond

• Opplysningsvesenets fond is an endowment for The Norwegian Church

• Its English name is The Norwegian Church Endowment

• The beneficiary is The Norwegian Church

• The Ovf’s net asset value is 6 billion NOK (or 720 million EUR/900 million USD)

Ovf’s Organisation

Controller Administration

IT

Department ofFinancial Assets

Dep. of Forrestry &Agriculture

Department of Property Dep. ofProperty Development

Dep.of Ministers' Housing

CEO

Ovf's Board

Ministry of Cultural andChurch Affairs

Opplysningsvesenets fond total asset

Opplysningsvesenets fond's assets NOK 6 billion/EUR 720 million

20 %

4 %9 %4 %3 %2 %

54 %4 %

Non commersial asset

Domestic Equity

Fixed Income

Foreigan Equity

Absolut Return

Private Equity

Real Asset

Cash

The SRI Guidelines

Revenue and SRI criteria

• The Church must benefit from Ovf

• We needed criteria that would not take away that benefit

• We wanted to find out if SRI criteria outperform or under perform non SRI criteria

• There are 14 indexes with SRI criteria

SRI index vs Ordinary

Domini 400 (SBI)

S&P 500

DJSGI (SBI)

DJGI

Return (%) 16.22 15.02 12.22 9.30 Assess Return (%) 1.20 2.92 Standard deviation (%)

15.38 14.27 15.29 14.16

Beta 1.06 1.00 1.03 1.00 Sharp ratio 0.72 0.70 0.46 0.29 Ex post tracking error

3.16 4.58

Information ratio 0.38 0.64 Source: ABN Amro

The guideline for our work

SRI +

SRI

SRI -

Society improving

Positive criteria

Neutral

Low tolerance

Zero tolerance

Area of activity•New energy forms•Health improvement•Environmental

Area of activity•Production of nuclear power•Pornography•Tobacco•Alcohol•Gambling•Weaponry

Area of conduct

• Developing in under developing countries

• Environmental improving• Sustainable use of resources

• Sustainable labour right

Area of conduct•Contraventions of Rights of the Child

•Contraventions of labour force•Contraventions of human right

•pollution•Contraventions of biological diversity

•Destroying of cultural monument•Some biotechnology areas

Ovf’s Social ResponsibleInvestment

SRI

The church fundamental ethical principles

Corporate governance

Profit

Publcity

Investment Universe

Negativecriteria

Positive criteria

Investment Universe Investment Universe

Investment Universe

The SRI criteria

The Investment policy

Some scenarios

• We go for the optimal scenario

Asset class Defenciv Offenciv OptimalCashDomestic Fixed IncomeForeigan Fixed IncomeDomestic EquityForeigan EquityHedgefundTime horison in year 1 5 1 5 1 5Estimated Return 6,9 % 39,8 % 8,0 % 47,0 % 7,1 % 40,8 %Value at Risk -2,2 % 14,2 % -12,8 % -10,7 % -3,5 % 10,9 %

0 %30 %30 %0 %

10 %10 %

15 %40 %10 %10 %15 %10 %

10 %30 %

20 %40 %10 %10 %

The Yale Endowment

The hedge of Real Estate

• We belief that Real Estate whit good contract give just as god hedge as hedge fund

Opplysningsvesenets fond – financial asset and return

Opplysningsvesenets fond financial assetNOK 1700 million/EUR 200 million

13 %

32 %

13 %9 %

2 %

16 %

15 %Domestic Equity

Fixed Income

Foreigan Equity

Absolut Return

Private Equity

Real Asset

Cash

2006 oct 2005 2004 2003 2002 2001 2000 1999Marked Value in million NOK 1726 1659 1397 1366 1180 1481 1610 1500Return in % 5,68 18,54 12,65 9,97 -13,78 -6,95 8,16 23,71

Society Improving investment

Society Improving investment• Undeveloped

countries● Finarca (leasing) 7

million NOK● LAAD (agricultural

bank) 7 million NOK● Solidus

(microfinance) 7 million NOK

● Kolibri kapital (microfinance) 0,5 million NOK

● Chikweti Forrest 40 million NOK

• Renewable energy● Kraftpartner 1,5

million NOK

• Health care● NeoMed 8 million

NOK

• Other● Verdibanken 3

million NOK

• Total 74 mill / 4,3% of financial asset

How fait consistent are the investment?

• Different SRI criteria– Society Improving

investing– No to activity of

enterprises– No to conduct of

enterprises– Best in class

• Different instrument– Hedge fund– Commodities– Derivatives– Fixed income– Private Equity– Real Estate– Equity– CDO’s– Forestry– Micro finance

Thank you

Harald Magne Glomdal

Phone: +47 23081580 Mobil: +47 45005321

hmg@ovf.no

Appendix

Correlation of asset class

Efficient frontierAdding alternative assets to the investable universe vastly improved theavailable set of efficient portfolios. Hedge funds and real estate offered the best efficiency in the alternative asset universe.

Return of hedge fund and volatility

Return and montley observation of private equity

Commodity return

Indexes