Former Norges Bank Investment Bank CEO to chair new green credit fund

Knut Kjaer partners with Ulf Erlandsson on new venture

The founding CEO of Norges Bank Investment Management, the arm of the central bank that runs the Government Pension Fund Global, has teamed up with an ex-bond trader at Sweden’s AP4 in an effort to launch a green credit fund.

Knut Kjaer, who headed up the now $1trn sovereign wealth fund between 1997 and 2007, will work with Ulf Erlandsson, best known for his fixed income strategy at the Swedish state pension fund.

According to a presentation given at the annual conference of the Climate Bonds Initiative in London today, he is the “incoming chairman” of the Diem Green Credit Fund. The work will be done in collaboration with Norwegian asset manager Sector Management, of which Kjaer is also Chairman.

Kjaer is also a Member of the Supervisory Board of APG Asset Management, and a Partner and Chairman of Nordic capital markets firm FSN Capital. He is a member of the advisory committees for China Investment Corporation, the Monetary Authority of Singapore and the Central Bank of Thailand. He recently stepped down from the advisory committee of the Government of Singapore Investment Corporation.Until 2001, he was Chairman of the Board of Cicero, The Centre for International Climate and Energy Oslo. Erlandsson is also on the Board of Cicero.

After leaving NBIM, Kjaer became president of RiskMetrics, the New York-based risk and ESG research company, that was acquired by MSCI in 2010 for $1.55bn.

Due to marketing restrictions, no further details of the new fund are currently available, but Erlandsson is known for work on credit-based hedge funds linked to climate impact.

After leaving AP4 in 2017, he joined Swedish investment house Strukturinvest Fondkommission where he was expected to launch Glacier Impact – a credit hedge fund using ‘carbon efficient’ long/short strategies, as well as buying green bonds. He launched a conventional, non-climate focused version of the fund, but left late last year following complications with the company, and did not launch Glacier Impact.

At the time, he told RI he still believed there were “compelling arguments as to why the concept could work”.