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EDINBURG — Financial advisers for Hidalgo County are now tasked with figuring out how to finance the courthouse project without Edinburg's help after the city failed to respond to multiple requests from the county regarding a $30 million contribution that now seems very unlikely to become reality.
County leaders have been tiptoeing around the issue ever since Edinburg's leadership changed last year following a hotly contested election, but on Tuesday, they were forced to acknowledge the new leadership is not interested in following through on the previous administration's agreement to contribute $30 million toward the construction downtown.
"I guess there's no easy way around it," Hidalgo County Judge Ramon Garcia said during the commissioners meeting Tuesday. "Ever since the November elections in the city of Edinburg, up until that point in time, the city of Edinburg was totally committed toward being a partner in the construction of the courthouse."
Garcia said he waited what he thought was "a reasonable time" before reaching out to the city at the end of 2017 to talk about the agreement.
"The city manager advised me that they were not ready yet, but that they needed to look into the financing of the city and some of the commitments that they had before they could meet with us, which sounded very reasonable," Garcia explained. "And we went ahead and waited."
He then sent a letter Jan. 25 to Edinburg's new mayor, Richard Molina, formally requesting a sit down, but this time, the city did not respond, Garcia said. So he waited about three more months before sending Molina another letter dated May 1.
In his second letter, Garcia set a May 10 deadline because "I didn't want to leave it just hanging," he said. The deadline, however, came and went and still there was no response from the city.
"I did not receive any letter, any phone call or any communication from Mayor Molina or any member of the new city administration," Garcia said. "So I have to assume they are no longer interested."
Hidalgo County Commissioner Eddie Cantu lamented the lack of support from Edinburg and highlighted the help the county has offered the city in economic development incentives totaling about $39 million over the past decade.
"We've given up millions of dollars over the years, even though our elected officials have changed," Cantu said. "We've always held tight. We've always stuck to the position made by the previous council, and so, you know, I guess we kind of expected the same thing. And till this day, we haven't seen it."
The Edinburg mayor says he is not shunning county officials.
"I'm not ignoring them by any means," he told a Monitor reporter Saturday during his Coffee with the Mayor event. "It's almost like, I got to make sure that our projects are done first before I look at their project. So really, it's not a priority for me right now."
Molina equated the $30 million commitment to a "gentleman's agreement" between the previous administration and the county even though he was part of the council that unanimously executed two interlocal agreements and a memorandum of understanding regarding the donation.
"None of those agreements are something that I've really looked at," he said about the alleged gentlemen's agreements, "but I can tell you that it will tie up our finances and basically cancel out all of our projects if we committed to the amount that was committed previously."
The mayor reiterated the construction of the courthouse is "100 percent" a county project, and said people don't seem to understand that. Still, he said, he wants to be a "team player" and come up with a viable plan to help the county, whether it's through "permits, infrastructure, or something that is going to benefit all of us."
"Once we are done with our priority projects, we do want to come up with a resolution that we can present to them," Molina said. "We just haven't gotten there."
The city's new financial adviser was tasked with coming up with a possible contribution, but the adviser has yet to finish computing the numbers, Molina said, adding he will eventually make his way down to the county to discuss the issue.
"If we could get some kind of a notice, a courtesy call, a phone call, a letter, letting us know what their position is now, we would certainly appreciate that," Garcia said during the commissioners meeting Tuesday. "But we have yet to hear from them."
Hidalgo County leaders were counting on three sources of revenue to help pay for the courthouse: property taxes, court filing fees and the contribution from the city of Edinburg. But now that the city has backed down, the county is left with only two funding sources, said Noe Hinojosa, the county's financial adviser.
"I think it's an unfortunate situation that you find yourselves under," he told county commissioners Tuesday, "but at the end of the day, (it's) one that we can try to come up with the right answer for you in the next couple of weeks."
Hinojosa will be tasked with figuring out how to finance the project without the $1.5 million the city was supposed to contribute annually — and also without having to increase the county's tax rate.
But, can it be done?
"That's the — I don't want to say the $64,000 question — but that's basically where we are," Hinojosa said after commissioners court. "We think we can, but at the end of the day we got to … do the analysis."
Previous estimates place the county's annual payment somewhere between $10 million and $11 million, Hinojosa said. That figure does not take into account Edinburg's contribution.
The idea was to have the city contribute about $1.5 million per year and to combine that with an estimated $1.5 million in court filing fees to reduce the county's payment to about $7 million per year, Hinojosa said.
The county already has "a nice savings account" of "less than $4 million" from the court filing fees the Texas legislature allowed the county to collect beginning in 2016 for the construction of the new courthouse, Hinojosa said. So far, those fees have amounted to about $1.2 million per year.
Still, county leaders remain confident they can undertake the project without a blow to the taxpayers.
"We can afford to do this on our own. It's just unfortunate that we're not going to have a partner, but we're ready and willing to do it on our own, and we have that ability," Cantu said. "We even were able to lower the tax rate last year, and still we have the confidence that we can finance this."
Sergio Cruz, the county's budget officer, agreed.
"It will make our work a little bit more difficult — as far as financing this project and knowing that we won't have that contribution — but I don't think it's anything that would make it impossible for us," he said.
Hinojosa and Cruz are slated to present several funding options for the county commissioners court to consider in the next coming weeks.


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We Just Found New Evidence of Organic Alien Life on the Planet Ceres
The 2015 Dawn mission to explore the dwarf planet Ceres may not have turned up evidence of life, but it did find the next best thing: Organic compounds on the surface.
These molecules are the building blocks of life, and the fact that Ceres has abundant water ice means that the little planet might be a suitable host for life.
Even better news? Now, a new study reveals the amount of organics on Ceres' surface may actually be several times larger than we initially thought.
When the Dawn spacecraft orbited over Ceres, it used its Visible and Infrared (VIR) Spectrometer to gauge how much sunlight was being absorbed and reflected by different parts of the dwarf planet's surface, allowing it to get a sense of its composition.
When this information was compared to the spectrum of light reflected by organic material on Earth, the Dawn team estimated that "between 6 and 10 percent of the spectral signature they detected on Ceres could be explained by organic matter." Most of the organic material on Ceres seemed to be concentrated in relatively small patches in the northern hemisphere.
However, a new study published in Geophysical Research Letters takes issue with the previous findings. Instead of using organic material from Earth, the team compared the spectrometer readings on Ceres to those of a meteorite.
According to Hannah Kaplan, a researcher at the Southwest Research Institute:
"What we find is that if we model the Ceres data using extraterrestrial organics, which may be a more appropriate analog than those found on Earth, then we need a lot more organic matter on Ceres to explain the strength of the spectral absorption that we see there. We estimate that as much as 40 to 50 percent of the spectral signal we see on Ceres is explained by organics. That's a huge difference compared to the six to 10 percent previously reported based on terrestrial organic compounds."
Though organic material was found on Ceres, it doesn't mean for certain that life exists there—a lot of asteroids and comets, for example, have organic compounds, but can't support life.
Still, studying Ceres organics might help researchers and astrobiologists to find life on other planets, like the ones that might be hidden in the Alpha Centauri system.

subset: commoncrawl


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- The Hare Book
- The Fox Book
- The Owl Book
A must-have for all British nature lovers, The Red Squirrel Book is a stunning compendium of fact and photography.
This compact and accessible guide introduces the reader to these instantly recognisable fixtures of British wildlife and documents their physiology, behaviours and continuing place in our consciousness. Including a range of over 200 spectacular images, it reveals why important efforts are being made to conserve this remarkable species.
Featuring sections on habitat, activity, feeding and breeding, this compact and accessible guide opens up the world of the red squirrel to the curious and the committed alike.
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October 2018
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Graffeg publishes illustrated books on subjects as diverse as; food, arts, culture, architecture, gardens, landscapes, photography, sport and lifestyle. Graffeg also publish a range of gift stationery, notecards, calendars, prints and posters. Graffeg has offices in Cardiff and Llanelli.
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Click here to visit our "Dice Fight - Ready to Roll?" shop page at The Game Crafter.
What? You don't want a chicken game? You prefer cute little robots instead? Okay, this is the game for you. Dice Fight: Mini-Robot Edition is the same game as the chicken edition above, but with robots. Oh, and this one comes in a rectangular box instead of a fried chicken carry-out bucket for those of you who are persnickety about your game shelves.
Scroll down to see some photos of people enjoying this game at Geekway to the West 2019.
2-6 players
16 Chickens Dice Fight to the Death is a fun, light-strategy game that takes a little more thinking and a little more time than the games above (10 minutes per player). You'll build a team of up to 16 chickens to help you eliminate your opponents.
You'll experience four fast-paced phases featuring card drafting, dice rolling, and discarding action cards at just the right moment. Each phase incorporates a careful balance of strategy, unexpected decision points, and it all ends with head-to-head dice fights aided by a secret weapon and a shifty rooster.
This is our original recipe and we think you'll like it.
2-5 Players
Our new roll-and-write game is quickly becoming a family favorite! In Dice Fight: Ready to Roll? each player will have a score sheet and a pencil. You'll also have some dice fight cards so you can change the value of the dice so they end in favor of the scoring criteria on your sheet. But watch out, because everyone is playing on the same dice, and everyone has a different scoring criteria! Hopefully, you'll be able to lock in some dice to your advantage before your opponents are able to do the same. The 'Take That!' fun never stops in what is soon to be your family's favorite roll-and-write game.
Click here to find a How-to-Play Video and also a link to purchase the game. You can find expansion score sheets here.
1-6 Players
Thanks for your patience as we continue to update our website to better help you learn about our family of Dice Fight Games. Check back soon for our new layout!
Until then, continue to click around and explore our site. Be sure to meet the chickens. They've been waiting for you.
Click here to see the NEW revised
game play instructions (rev. June '19)
We'd like to thank all the playtesters at Geekway to the West 2019 for the fun times and great feedback on the Mini-Robot edition of the game! It was great playing with you and we're especially appreciative for those who came back with friends to play again!


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The mere mention of the name Robert Campeau, Canada's bold, brash and supremely confident tycoon, was once enough to send waves of fear through North American corporate boardrooms. Now, with most of his influence dissipated and his retail empire under Chapter 11 of the U.S. Bankruptcy Code, the Toronto businessman's dramatic fall may serve as a chilling epitaph to the financial excesses of the 1980s.
Throughout that decade, corporate raiders, speculators and financiers strode through the corridors of the financial world voraciously hunting for acquisitions. To finance their massive buy-outs, they borrowed billions of dollars. Their audacious deal-making earned the titans of takeover vast personal fortunes and, in the process, they became international celebrities.
But last week, as Campeau fought to retain what was left of his shattered empire, many businessmen and analysts predicted that the era of the hostile takeover is now dead.
Boom: In fact, most of the forces that fuelled the mergers and acquisitions boom have faltered. The number of companies ripe for picking as a result of undervalued stock prices has dwindled. Pressure on management to quickly turn in dramatic growth and profits to satisfy directors and shareholders has slowed. As well, the wave of defaults by overburdened tycoons such as Campeau and U.S. entertainer and financier Merv Griffin has destroyed the market among professional in-
vestors and institutions for the high-risk, highyield, so-called junk bonds, which provided most of the takeover financing over the past decade. Concluded Harry Raímala, a corporate real estate analyst with Toronto investment house McLean McCarthy Ltd.: "Investors have woken up to the realities of junk bonds. They forgot that a 14to 15-per-cent rate of
return implies a horrible degree of risk." Now, many of the once-feared tycoons who were capable of quickly raising billions of dollars for takeovers are in severe financial difficulty. With corporate greed no longer so easily or safely satisfied, the takeover artists and their investment bankers are more often reviled than lionized. Many, such as Australia's buccaneering Alan Bond, have already watched their empires collapse after a decade in which they easily accumulated diverse assets and charged headlong into businesses that they knew little about. And many who survived, like Chicago takeover artist William Farley, are struggling to meet the huge debts they incurred to finance their billion-dollar purchases. Even powerful businessmen and corporations that emerged from the 1980s relatively unscathed, such as U.S. raiders T. Boone Pickens and Carl Icahn, have been hobbled by reluctant lenders and investors.
Fuelled: The mergers and acquisition explosion was fuelled by one man: Michael Milken, the investment genius at the New York City investment firm Drexel Burnham Lambert Inc. Milken, who is now facing a 98count federal investment fraud indictment, developed the process of harnessing junk bonds to finance corporate takeovers. The bonds are issued by corporations with low credit ratings but offer interest-rate yields that are much higher than for normal bonds. Generally, junk bonds have been slow to have an impact in the smaller Canadian capital markets, where only an estimated 100 junk bond issues have been launched since 1986, mainly by U.S. lenders. But in the United States, they were instantly popus lar with sophisticated prog fessional and institutional g investors, who, gambling that a high return was worth the risk, suddenly provided a new and almost-bottomless pool of financing. The ensuing greedy stampede for profits in the United States propelled a wave of corporate mergers and takeovers, whose value before the decade ended soared to $1.5 trillion, much of it financed with junk bonds.
Milken's revolutionary methods made it possible for even a small raider like T. Boone
Pickens, the maverick chairman and chief executive of Texas-based Mesa Petroleum, to mount a once-inconceivable attempt to buy the mighty Pittsburgh Gulf Oil Co. in 1984 with $2.2 billion in junk bond financing. By the time Gulf finally repelled Pickens by buying back the Gulf shares that he had purchased with the bonds, its share price had been driven up substantially, and Pickens made a profit of $464 million. His audacious action—forcing a large firm to buy out his shares at an inflated price—became known as "greenmail."
But the leveraged buy-out, or LBO practitioners, soon elbowed out the greenmailers. They too used junk bonds as the favored method of borrowing heavily to buy control of a company, swiftly selling off assets, usually subsidiary firms, to pay off the debts— often at a huge profit.
As the LBOs spread, no company seemed large enough to fend off a buy-out. Even RJR Nabisco Ltd. of Atlantic City,
N.J., one of the largest companies in the United States with $16.2 billion in sales in 1988, could not escape. In 1989, New York investment adviser Kohlberg, Kravis, Roberts & Co. bought the multinational for $30 billion, financed largely by junk bond sales, making it the largest LBO in history. Said Janet Mangano, director of research at New York's Josepthal
& Co. Inc.: "The credo became 'Let's do the deal at any cost.' The deal itself didn't matter." As the corporate raids and LBOs increased, many corporations that felt threatened by possible takeover bids themselves turned to junk bonds for protection. They sold them to raise cash to buy back their own shares and keep them out of the reach of acquisitors such as Campeau. Another popular technique to ward off unwelcome raiders was the issuing of extraordinary dividends to prevent shareholders from revolting.
The aggressive strategies on both sides of the corporate takeover wars led to a dramatic rise in corporate debt during the 1980s. And, as Campeau's desperate battle illustrated, analysts say that both raiders and the companies they acquired, or tried to acquire, are now dangerously vulnerable to everything from an economic downturn to rising interest rates because of the increased debt loads. Explained Michael Iscove, president of Creative Fusion Ltd., a Toronto-based mergers and acquisitions firm: "A lot of companies that tried to do deals should be looking back and heaving a sigh of relief that they did not get caught up in what was going on."
Indeed, the Campeau debacle seems to mark the end of the era of rapid acquisitions. In
fact, a string of complex, high-profile takeovers, including the $2.8-billion takeover of building materials company Jim Walter Corp. by Hillsborough Holdings Corp., a leveraged buy-out company set up by Kohlberg, Kravis, Roberts & Co., has run into serious financial problems in the United States in the past six months, leaving lenders holding more than $8 billion in now nearly worthless junk bonds.
Default: Moreover, analysts say that, with Campeau in Chapter 11 bankruptcy proceedings and with other companies threatening to default, businessmen launching takeovers in the future will have great difficulty raising money with junk bonds. All told, $11 billion in new junk bonds were sold to finance takeovers in the first nine months of 1989, compared with $26 billion worth during the same period in 1988. Said Alfred Powis, chairman of Torontobased Noranda Inc., whose company last summer acquired Toronto-based Falconbridge Ltd.: "Anyone making a major acquisition is going to be treated with a certain amount of caution from now on."
Along with Campeau, some of the biggest setbacks have been incurred by a number of the most celebrated corporate raiders of the past decade. Icahn, for one, the enigmatic New York businessman who made millions by greenmailing large share positions in such giants as Bartlesville, Okla.-based Phillips Petroleum Co. and Uniroyal Chemical Co. Inc. of Painesville, Ohio, appears to have been forced out of the takeover contest altogether by a serious miscalculation last year. After spending
$1.2 billion in 1989 to buy Trans World Airlines Inc.
(TWA), the synagogue cantor's son from Queens, N.Y., has been tied down by management and financial problems at the airline.
Meanwhile, Pickens declared last year that he was leaving the U.S. takeover field permanently. Following his announcement, in which he said "our motives were sincere" about his takeover forays, he shifted his corporate focus across the Pacific to Japan. There, he is entangled in what appears to be a doomed attempt to gain control of a Japanese auto-parts maker,
Koito Manufacturing, whose
shareholders have so far defeated his bids.
Other well-known businessmen who used junk bonds to finance their takeovers have also been stranded by the collapse in junk bond prices. For one, Chicago underwear tycoon
William Farley, who for $1.4 billion in 1985 acquired U.S.based Northwest Industries, the maker of Fruit of the Loom products, has been unable to complete the financing of his $3.6 billion 1989 raid on textile giant West Point-Pepperell Inc. of West Point, Ga. And if investors and bankers refuse to come to his aid with permanent financing and bridge loans by March, he will face large losses.
Casualty: Another highprofile casualty, and relative newcomer to the world of corporate wars, is Merv Griffin. The portly entertainment tycoon has made a fortune by creating such hit television programs as Wheel of Fortune, hosted by celebrities Pat Sajak and Vanna White, and Jeopardy. Two years ago,
Griffin entered the world of high finance when he outbid fellow millionaire developer Donald Trump in a battle for control of Resorts International Inc., a Miami-based casino and hotel operator. But last October, when it became clear that Griffin would be unable to generate enough profit to pay for the $1-billion debt that he had accumulated in his takeover fight, he was forced to turn over control of the company to his major creditors.
Like their U.S. counter-
parts, several major Canadian businessmen who participated in the 1980s takeover wave were also scarred by the experience. Last year, Toronto-based Unicorp Canada Corp., which set new Canadian standards for corporate ag-
gression with its 1985 takeover of Union Enterprises Ltd., failed to take control of both Randolph, Mass.-based Dunkin' Donuts Inc., the world's biggest doughnut chain, as well as the Quebec-based grocery chain Steinberg Inc.
And while Nova Corp. of Alberta, led by its scholarly chairman, Robert Blair, was more successful than Unicorp, Blair is still trying to turn a recent celebrated acquisition into a financial success. After using $2.3 billion in borrowed money to acquire the Toronto-based petrochemical company Polysar Energy & Chemical Corp. in 1988, Nova Corp. is now selling off $500 million in assets to cut its debt. Still, Nova president James Butler said that he has no reservations about the Polysar deal. He added, "We felt we could do it, and we can."
Raiders: Even in Europe, where the takeover game remains hot as companies prepare to compete in the single-market economy,
which begins in 1992, corporate raiders are facing difficulties. Last year, celebrated AngloFrench financier Sir James Goldsmith used junk bonds to finance a mammoth $24.4-billion takeover attempt of British American Tobacco (BAT) Industries Inc., one of the world's largest companies. But Goldsmith's bold bid has encountered serious legal problems.
As well, Australian Alan Bond, who became a national hero in that country after he won the America's Cup yachting trophy from the United States in 1983, once owned an empire that included such diverse assets as Chile's telephone system and New York's posh St. Moritz Hotel. But the flamboyant Australian amassed $6.5 billion in debt while building his empire, and now, faced with the prospect of complete bankruptcy, he has placed his company in a controlled liquidation. At the same time, he has been selling assets, including his yachts, his Sydney mansion and Vincent Van Gogh's spectacular Irises, which he bought last November for $65 million in mostly borrowed money.
While the surviving corporate celebrities of the 1980s battle to remain profitable, Milken appeared to formally signal the end of the takeover era when he recently began advising companies to avoid junk bonds and, instead, to use the traditional means of issuing common stock to finance expansion. And Ivan Boesky, another celebrated financier who made millions using inside information to profit from corporate takeovers, is following a more spiritual course, far removed from Wall Street. Boesky, who is finishing a three-year prison sentence in California, has grown an extremely long, white beard, and instead of money, he is now pursuing a newfound fascination with his Jewish religious roots.
For the rest of the corporate world, most of which views the raiders' distress with quiet satisfaction, the main issue now is whether the former marauders can ever recover from the huge debts of the decade-long takeover binge. If not, they too could follow in Robert Campeau's lonely footsteps.
JOHN DeMONT


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In the press
Here you can find current articles in the press.
From the medical field
Here we present articles regarding cannabis from medical and research publications.
Legal matters
The German legal environment is constantly changing. Here we cover legal topics as they relate to cannabis.
Determining the future together
We are convinced that good supply can only be achieved by working together.


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OCZ Agility EX Series SSD Review
PCMark Vantage (Continued)
Our next series of Vantage tests will stress the current weakness of most SSDs, that being write performance. Applications like video editing, streaming, and recording are not what we would call a strong suit for the average SSD, due to their high mix of random write transactions. We should also note that it's not so much a weakness of the memory itself, but rather the interface and control algorithms that deal with inherent erase block latency of NAND flash. SSD manufacturers are getting better at this, but still today, there are issues to contend with.
Here, the Agility EX redeemed itself by producing excellent results in this round of PCMark Vantage testing. It performed considerably well in the Media Center benchmark with a result of 199.03 MB/s, the fastest in this group. In the remainder of the tests, the Agility EX held a commanding lead over both Intel drives and the OCZ Vertex, but trailed Corsair's P256 SSD by a narrow margin.


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Silhouette Studio Version 4 has some exciting new features; please see the video links listed below.
To have access to these features, please first ensure you are using the latest version of Silhouette Studio, which can be updated here, https://www.silhouetteamerica.com/software
***Note: Not all of the following features are included with the basic, free edition of Silhouette Studio. An upgrade may be required to access some of these features. The required upgrade is mentioned in each video below. Software upgrades can be purchased here, https://www.silhouetteamerica.com/shop/software-and-download-cards/silhouette-studio
Why was this FAQ not helpful? (select all that apply)


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"My Name Is Raga" the film will trace the personal and political journey of Rahul Gandhi.
The teaser of the film has already been released and it features many members of the Gandhi family. However, Paul is planning to shoot some new scenes to cover new developments. He said, "We are planning to shoot at more interesting locations like Collin College in the US where he had to study with a fake name and also the school where he completing his schooling and also a brief portions in Italy where his grandparents lived."
Though the release date of the film hasn't been announced, it's likely to hit the screens before the general elections of 2019.


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The Norwegian asset management industry is, as other parts of the Norwegian economy, interconnected with the Norwegian oil and oil services industry, as well as a state active in the financial markets. The state has substantial net financial assets in its sovereign investment fund, the Petroleum Fund, with a current value of over approximately 9 trillion kroner (see Section VI.v). This is, at least partly, because of income from oil and gas extraction, and the high level of activity related to this sector for several years until 2015. The Petroleum Fund does not invest in the Norwegian economy, but the economic growth spurred by the oil and gas sector benefits the mainland economy as a whole, making Norway (relative to its size) an attractive investor market for both foreign and domestic asset managers. However, with a combination of an open market for foreign actors and a less developed legal framework for Norwegian asset managers, the Norwegian asset management industry has only partially been able to capitalise on a strong domestic market to make significant forays into other investor markets.
The abrupt and relatively large drop in crude prices that started at the end of 2014 has had its effects felt in the Norwegian 'real' economy. In 2016, for the first time since the inception of the Petroleum Fund, more money was transferred out of the Fund (for public spending) than into it (petroleum-derived income), and this was also the case in 2017. Oil exploration was reduced (with a number of fields proving unsustainable under current oil prices) and activity in the oil services industry, where several companies are private equity-owned, was severely reduced. This development brought with it reduced investment activity by private equity funds with respect to oil and gas. Since 2016, however, crude prices have risen from the low thirties to the high seventies per barrel. This has led to resumed activity in the sector and several large deals and, in 2018, more money was deposited to the Petroleum Fund than transferred out.
After record fundraising levels in 2016, totalling 17 billion kroner over nine funds,2 the level of fundraising decreased in 2017 to a total of 899 million kroner before increasing again to 4.5 billion kroner in 2018. As Norway is a small market and the number of Norwegian managers of private funds is relatively low, there are generally large variations year on year.Both 2017 and 2018 saw a decrease in investment activity by Norwegian private equity firms with 8.5 billion kroner and 8.1 billion kroner respectively, compared to the highest ever recorded investment activity by Norwegian private equity firms with 11.7 billion kroner in 2016.
At the end of 2019, there were 29 authorised mutual fund management companies and 423 mutual funds established and registered in Norway. The Norwegian mutual funds market is, however, dominated by a small number of large managers, such as the major banks and credit institutions present in Norway (e.g., DNB, KLP and Nordea). The previously independent management company Skagen was acquired by insurance group Storebrand in 2017, meaning that the market is largely divided between these four, together representing approximately 75 per cent of total assets under management. Total assets under management by Norwegian mutual fund managers amounted to 1.140 trillion kroner at the end of 2018.3 2018 marked a slight increase from 1.138 trillion kroner at year-end 2017. The timid results reflect a volatile stock market throughout 2018.
No new hedge funds managed by Norwegian managers have been established since the Incentive Active Value Fund was launched in 2014, managed by Incentive AS under Sector Asset Management AS' umbrella. This may be related to the international trend of investors generally reducing their allocation to hedge funds. As Norwegian insurers now are under the Solvency II freedom of investment rules, as are Norwegian pension funds (as of 1 January 2019), the marketability of such products may increase as such investors are searching for better returns, provided managers are capable of offering sufficient reporting facilities for regulated clients to perform a 'look-through' to the underlying investments.
Unregulated funds make up a significant portion of collective investments in Norway in both the retail and professional markets. This is particularly the case within real estate investments, which is an important asset category in both the institutional and retail investor markets. For such funds, few official or public figures currently exist. With the implementation of the Alternative Investment Fund Managers Directive (AIFMD)4 and reporting requirements for all Norwegian alternative investment fund managers (AIFMs), statistics have become available, creating a more transparent fund landscape across different segments. At the end of 2018, a total of 39 managers were authorised as AIFMs (including managers of regulated mutual funds that are AIFs) by the Financial Supervisory Authority of Norway (FSAN). A total of 99 AIFMs were registered and 351 alternative investment funds established in Norway (including regulated mutual funds that are AIFs) were registered. Although no official statistics exist, the number of real estate funds has been reduced over the past couple of years, due mainly to developments in the credit and real property markets.
Assets under management by Norwegian investment firms offering (individual) portfolio management amounted to 92 billion kroner at the end of 2018, compared to 106 billion kroner at the end of 2017.5 This previous reduction was primarily caused by regulatory changes, as the largest Norwegian investment firms providing portfolio management have been consolidated into asset management companies and regulated as either undertakings for collective investment in transferable securities (UCITS) management companies or AIFMs providing individual portfolio management as an ancillary service.6 The continued reduction into 2018 may indicate that smaller asset managers are losing ground to the larger bank-integrated investment managers.
Norway is a Member State of the European Economic Area (EEA). As such, the main body of legislation regulating asset management (whether as part collective investment schemes or insurance companies and pension funds) consists of EU legislation implemented in Norwegian law.
Since the entry into force of the EEA Agreement in 1994, Norway has generally implemented EU legislation with great assiduity, and often chosen stricter regulation where possible. This changed significantly following the establishment of the EU system of financial supervision in 2011. The EU supervisory organisations, the European Banking Authority, the European Securities and Markets Authority, the European Insurance and the Occupational Pensions Authority, hold competences that are partly supranational. These run afoul of the principle of the EEA Agreement, whereby no sovereignty shall be relinquished by the EEA Member States, and which was an important issue for Norwegian authorities when entering into the EEA Agreement (after EU membership was rejected by referendum in 1994, for the second time).
The European Free Trade Association and the EU did not reach an agreement concerning the incorporation of the EU Regulations establishing the European Supervisory Authorities into the EEA Agreement and integration into the EU system of financial supervision before 14 October 2014.7 The Agreement was approved by the Parliament in June 2016, but EU financial regulations passed since 2015 largely continue to see delays in being incorporated into the EEA agreement (see Section V).
The following is restricted to Norwegian law, and where stated, Norwegian regulation of foreign entities' activity in Norway on a cross-border basis.
Collective investment schemes are both regulated and unregulated under Norwegian law (at the fund level). From a regulatory point of view, a distinction can be made between three types of collective investment schemes: mutual funds that are UCITS funds,8 non-UCITS mutual funds and other collective investment schemes. Norwegian law will reflect the additional EU fund types as European venture capital funds (EuVECAs), European social entrepreneurship funds (EuSEFs), European long-term investment funds (ELTIFs), and money market fund regulations are incorporated into the EEA Agreement and implemented in Norwegian law.
UCITS funds and non-UCITS mutual funds fall within the scope of the Norwegian Investment Fund Act (IF Act). Such funds may (if established in Norway) only be organised, managed and marketed according to the rules of the IF Act (and appurtenant regulations). Whether a collective investment scheme is a mutual fund falling within the scope of the IF Act (or rather an unregulated alternative investment fund) must be assessed on a case-by-case basis. As a general rule, all open-ended funds investing in financial instruments9 and bank deposits fall within the scope of the IF Act. Managers of non-UCITS mutual funds exceeding the threshold values of the AIFMD (€100 million under management) are regulated by the Norwegian Alternative Investment Fund Manager Act (AIF Act), implementing the AIFMD, meaning that such managers must be authorised AIFMs and comply with the AIF Act. Sub-threshold managers may 'opt in' to benefit, in the future, from the marketing provisions of the AIF Act in other EEA jurisdictions.
Currently, several categories of investment funds (at the fund level) are unregulated in Norway (all types of funds other than mutual funds regulated under the IF Act). Closed-ended funds and open-ended funds investing in asset classes other than financial instruments and bank deposits (e.g., real property, commodities (directly and not in derivatives)), generally fall outside the scope of the IF Act. Such collective investment schemes are unregulated in Norway. Following the entry into force of the AIF Act on 1 July 2014, the management and marketing of shares in such funds are regulated under the AIF Act.
The AIF Act and the implementation of the AIFMD in Norway are to a large extent based on a copy out approach, with little to no 'gold-plating'. Norway has implemented the AIFMD thresholds, allowing for light-touch regulation of asset managers of smaller funds that are not mutual funds (in simple terms, less than €500 million for closed-ended funds and less than €100 million for open-ended funds). Managers of sub-threshold funds may 'opt in' to benefit from the marketing provisions of the AIF Act. Management of Norwegian unregulated funds by managers falling below the threshold values of the AIFMD and that are established in Norway will remain unregulated (although the manager will have to register with the regulator, the FSAN).
The AIF Act and its marketing rules have had a substantial impact in the Norwegian market. While marketing of unregulated funds previously could be made without specific restrictions (other than prospectus rules, rules concerning investment services and general marketing law), the AIF Act introduced common marketing rules for all types of alternative investment funds (both those falling within and outside the scope of the IF Act). The FSAN has focused on monitoring marketing carried out by sub-threshold managers, as such managers no longer may market to non-professional investors (without opting in), and in particular reliance upon reverse solicitation practices.
The marketing rules are dependent upon the jurisdiction of the manager and the fund. Norway has implemented the 'private placement' provisions of the AIFMD with respect to funds and managers established outside the EEA. On this point, however, the rules are somewhat more strict than under the AIFMD, as they require prior authorisation from the FSAN to market, rather than relying on notification. In addition, for fund managers established outside the EEA, there is a requirement that they are registered with a competent authority and subject to prudential supervision in their home state for the purposes of asset management. If the interests issued by unregulated investment funds are financial instruments (shares), then services related to such shares (such as arrangement services or second-hand share sales) constitute investment services that fall within the scope of the Securities Trading Act (ST Act). There is a relatively large number of funds authorised for marketing in Norway under these rules. A revised ST Act, implementing the substantive rules of MiFID II entered into force on 1 January 2019 (see Section V). In addition, the offer of such shares may trigger a requirement to publish a prospectus under the public offering rules of the ST Act, unless an appropriate exemption is available. Shares in limited partnerships are not viewed as financial instruments (transferable securities) under Norwegian law, meaning that prospectus requirements do not apply to offerings of interests in such funds. No change has been made to this through the implementation of MiFID II. Rules implementing the Prospectus Regulation have recently been adopted and are expected to enter into force shortly.
Provision of investment services as a regular occupation (i.e., not in an incidental manner) related to limited partnership interests requires a corresponding licence under the ST Act (alternatively for foreign firms, a passport for providing such services in Norway). A licence is not required when services are provided in relation to interests with a minimum commitment of 5 million kroner (or the equivalent in another currency), or if the client is a professional client as defined in MiFID Annex II Section I (per se professional clients and not elective professional clients). The purpose of this requirement was to regulate retail sales of closed-ended funds after what has been perceived as mis-selling of shares in such funds to retail clients, especially with respect to closed-ended real property funds, feeder funds of private equity funds or fund of funds in such categories. After the entry in effect of the AIF Act, this is largely regulated by the marketing rules of that Act (with respect to the primary market), and the FSAN has recently announced change of practice to regulate a wider array of collective investments under the AIF Act (see Section VI.v).
Individual portfolio management is an investment service under the ST Act, and subject to the rules and appurtenant regulations of the ST Act. Only investment firms and credit institutions authorised under the ST Act, management companies for mutual funds or AIFMs authorised to provide portfolio management (as an ancillary service) may provide individual portfolio management services.
Activity falling within the scope of the IF Act, the AIF Act and the ST Act is under the supervision of the FSAN.
Asset management carried out by insurance companies and pension funds is regulated through the insurance company legislation and under the supervision of the FSAN. Norway has implemented the Solvency II capital adequacy rules for insurance companies with effect from 1 January 2016 (on a 'lookalike' basis: see Section V). The main rule applicable to their asset management is the prudent person principle. This requirement concerns both the investment process and the placements themselves. Pension funds are are, as of 1 January 2019, subject to a risk-sensitive capital requirement under freedom of investment based on a Solvency II 'light'.
As mentioned in Section II, collective investment schemes established in Norway either fall within the IF Act, or outside specific regulation (at the fund level).
Funds that are regulated under the IF Act are required to be organised as contractual (rather than corporate) mutual funds under that Act. This is a specific form of organisation that, as a general observation, implies a high degree of connectedness between the management company and the funds managed by such company. For example, shareholders in the funds are entitled to elect a number of members of the board of the management company (and the management company obliged to appoint such board members). The fund has a legal personality, but all dispositions shall be taken by the management company.
Norwegian company law is generally not adapted to organise open-ended fund structures, as Norwegian limited company law does not allow for limited companies with variable capital. Unregulated (closed-ended) funds are almost without exception organised as corporate structures (private limited companies), partnerships or silent limited partnerships. In recent years, some fintech actors have begun structuring crowdfunding vehicles as cooperatives, because shares in cooperatives may be marketed and sold without restriction under the prospectus rules or the ST Act.
Before June 2010, Norwegian legislation did not allow for the establishment of hedge funds in Norway. Pursuant to an amendment of the IF Act enacted in 2010, such funds may be established and marketed under the IF Act. Because of this legislation having entered into effect relatively recently, many Norwegian promoters of hedge funds have traditionally chosen to establish funds in other fund jurisdictions, such as Ireland, Luxembourg or Malta. Such funds have been, and continue to be, managed by Norwegian teams under delegation arrangements with self-managed corporate fund structures (plc or SICAV). Such managers were previously subject to the ST Act, and required to be authorised as an investment firm providing the investment service of portfolio management. Following the entry into effect of the AIF Act, such managers will typically (depending on the organisation of the relevant fund structure) be required to be authorised under the AIFMD as an alternative investment fund manager.
No changes have been made to the IF Act with the implementation of the AIFMD (except certain changes to the marketing rules). Nor has any new fund legislation been proposed or passed. Norway therefore lacks appropriate legislation (or infrastructure) to be an attractive jurisdiction for fund establishment, compared to other jurisdictions. The Ministry of Finance is currently in the process of implementing the regulations underpinning EuVECAs, EuSEFs and ELTIFs. These EU regulations will represent wholly new types of regulated investment vehicles in Norwegian law. Due to the delay in incorporating these regulations into the EEA Agreement, such rules will likely not enter into force until 2020.
Authorised AIFMs are required to appoint a depositary to their funds. This includes unregulated funds not previously subject to such a requirement. Although there is a limited number of available service providers in this segment in Norway, this has not proven to be a bottleneck for the establishment of new funds.
Since the entry into force of a new Act on Financial Undertakings and Financial Groups on 1 January 2016, Norwegian law no longer allows for the establishment of securitisation vehicles, and securitisation outside covered bonds is generally not possible on suitable terms. It is expected that Norway will implement any EU securitisation rules if and when they are proposed as part of the Capital Markets Union initiative. Whether there will be a delay in implementation of such rules, as with other financial regulations these past few years, remains to be seen. Rules governing synthetic securitisation will be implemented upon incorporation of the Capital Requirements Regulation into the EEA Agreement and full transposition of the regulation into Norwegian law.
Individual portfolio management is mainly restricted to institutional clients (pension funds) and high-net-worth investors through private banking offerings. The structuring of investments will typically be bespoke and adapted to the client at hand.
In the retail segment of asset management, significant amounts are invested through unit-linked insurance policies. Several Norwegian insurance companies offer unit-linked life insurance, which offers policyholders the opportunity to invest in a number of assets (although mainly mutual funds and listed instruments) as underlying in a unit-linked insurance contract. Tax rules make holding investments through a unit-linked insurance policy more favourable (for private individuals) compared to holding such investments directly or through mutual funds. Insurers generally provide web-based tools for investors to monitor and make changes to their portfolio, without triggering taxation. The government has enacted changes to the applicable tax rules to avoid different tax treatment of what – in substance – are similar-type investment products which require that the relevant unit link policy has a larger insurance element. Whereas previously the contracts promised a 101 per cent payout upon an insurance event, the new rules require a payout of 150 per cent for the insurance policy to qualify. In this context, the Ministry of Finance also adopted rules for an 'equities savings account', which is a specific tax treatment of securities accounts of private individuals containing only equity instruments and equities mutual funds. This provides more favourable tax treatment for investments in such asset classes than direct investment. Investments are made directly in the name of the investors (as is the case for individual portfolio management), and may be offered by credit institutions, investment firms and management companies for mutual funds.
Sources of investment into managed investment products may be divided in several categories, but the main distinction is between retail investors and professional and institutional investors. High-net-worth individuals and family offices will often be a residual category, where the size of the portfolio will be the main differentiator. One key trend, only recently reversed, has been a decline in funds stemming (directly) from retail investors. Indirect investments from such clients have, however, continued to grow as defined contribution pension schemes (rather than defined benefit) have become the norm for all employees.
Through various investment companies and schemes, the government is also a sizeable investor in the Norwegian financial markets in listed securities, private equity and the venture and seed segment (see Section VI.v).
It is worth noting that the government is also a heavy investor in Norwegian private equity funds (e.g., through the government-owned investment company Argentum Fondsinvesteringer AS and its affiliates). The government has established a seed fund initiative through Innovasjon Norge (a government-funded initiative for the development of Norwegian businesses). Alliance Venture Spring and ProVenture Management have been appointed as the managers for the new seed funds. Each fund will have commitments equal to approximately 500 million kroner, of which 50 per cent will be subscribed by the government.
With regard to Norwegian mutual funds, the majority of assets under management stem from Norwegian institutional clients (representing 626 billion kroner at the end of 2018, compared to 631 billion kroner the previous year, and 564 billion kroner the year before that).10 At the end of 2018, Norwegian retail investors held 420 billion kroner (including holdings through pension savings schemes where the client elects underlying, compared to 398 billion kroner the year before and 316 billion kroner in 2016), while foreign investors (all categories) at the end of 2018 held 117 billion kroner of assets under management in Norwegian mutual funds, compared to 109 billion kroner in 2017 and 102 billion kroner in 2016. These figures do not include mutual funds established in other states and managed by a Norwegian manager (see Section VI.iii).
One notable absence is the lack of investment in infrastructure through market-based vehicles. This may change with the implementation of the ELTIF regulation, which allows for marketing to non-professional investors. Insurance companies and pension funds were prohibited from owning more than 15 per cent of an issuer conducting business other than insurance activities. This rule has effectively prohibited life insurance companies from making appropriate investments into infrastructure, both directly and through collective investment undertakings. Following action by the EFTA surveillance authority citing the provisons of freedom of investment under Solvency II the government proposed to repeal the restriction and the amendment entered into effect on 1 January 2019. Norwegian life insurance companies and pension funds may now benefit more fully from the Solvency II infrastructure investment risk weights.
i Intensified competition
In general, the Norwegian economy weathered the effects of the global financial crisis without experiencing significant difficulties. This is at least partly because of Norway's income from oil and gas extraction, providing the state with significant and steady tax income. With respect to the asset management industry, the market turmoil of 2008 led to a shrinking market, and increased competition among asset managers and managers of mutual funds for the remaining market share. This was compounded by the effect of the fall in oil prices since 2014.
The fall in oil prices was a negative factor for issuers listed on the Oslo Stock Exchange, and losses typically led to mutual funds falling out of favour with retail investors in the short term. The total number of funds was reduced from 441 in 2014 to 404 at the end of 2015, illustrating a consolidation.11 This increased since to 433, but has decreased again to 423.
Combined with generally low returns in fixed income markets, the value reductions have led to investors across all categories to be more aware of the level of fees. In the retail market, the Norwegian Consumer Council has focused on a long-time practice among Norwegian managers of mutual funds to levy success fees without implementing a high-water mark, meaning that volatility will benefit the manager and be to the detriment of investors. This practice has not been present in the institutional market, but larger investors are increasingly pushing for lower management fees for all fund types.
On the regulatory side, the FSAN has compelled both DNB Asset Management (the asset management arm of Norway's largest bank) and Nordea to take fee cuts on some of their mutual fund offerings boasting 'active management'. The FSAN found the funds to be 'closet index funds', where the fees imposed on investors did not provide the investors with any realistic chance for higher returns. The consumer organisation Forbrukerrådet has since led a class action lawsuit against DNB claiming damages on behalf of 150,000 investors. On 2 June 2017, the appellate court upheld the decision by the city court to approve the class action lawsuit (which is the first class action lawsuit in Norway) sponsored by the Norwegian Consumer Council, which it lost in the judgment of the city court on 12 January 2018. The verdict was appealed by Forbrukerrådet, and in its judgment on 8 May 2019, the appellate court awarded damages to the relevant clients. DNB has decided to appeal to the Supreme Court.
It remains to be seen whether the regulator will take any further initiatives concerning costs and fees in collective investment schemes as has been done in other jurisdictions. Notwithstanding, the advent of the requirement to produce a key information document under the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation (albeit in the retail market) will provide additional transparency and may favour investment in low-cost index funds. As with other EU regulations, the implementation of this Regulation is delayed, and will likely not happen before 2020.
ii Regulatory delay
As a member of the EEA, Norway is required to implement EU financial sector legislation. Norwegian authorities are currently working on the implementation of the backlog of EU financial legislation, which has been delayed by the EU financial supervisory system (see Section II). This concerns both legislation that has been implemented on a lookalike basis (such as the Capital Requirements Directive (CRD IV along with delegated acts), the European Market Infrastructure Regulation (EMIR)), MiFID II/MiFIR, and legislation that has not yet been implemented in any way (e.g., the PRIIPS Regulation, the EuVECA, EuSEF, ELTIF and MMF Regulations, and the Securities Financing Transactions Regulation).
Legislation of particular interest to the legislator has been implemented in Norwegian law on a lookalike basis (e.g., Solvency II,12 CRD IV, the Capital Requirements Regulation and the revised Payment Services Directive). Often, this approach leads to certain discrepancies in the rules, which may be problematic in some cases.
The high level of change in EU financial legislation since the financial crisis in 2008, combined with the long-time unresolved supervisory question, have led to long delays in the implementation of several pieces of EU financial legislation in Norway.
Following the agreement concerning the EU financial supervisory system, outstanding legislation is expected to be incorporated into the EEA Agreement as soon as possible. The combined effect of more extensive EU financial sector legislation than before, and trying to 'catch up' with the EU, has put a strain on the resources of the FSAN and the Ministry of Finance. Together, this negatively affects the asset management industry and the Norwegian financial industry as a whole, which must cope with higher regulator fees and reduced service.
i Insurance and pensions
Norwegian insurance companies and pension funds are regulated under the Act on Insurance Activity13 with appurtenant regulations and the Act on Financial Undertakings and Financial Groups, which contains the 'institutional' rules and capital requirements. Together, these acts implement Solvency II, including the rules concerning investment freedom and qualitative investment rules (the 'prudent person principle').
Before Solvency II, for both life and non-life companies, a maximum of 10 per cent of their total technical reserves could be invested in 'miscellaneous assets'. This category consisted of non-listed equity and fixed income investments, including loans and various collective investment vehicles that fell outside UCITS. Hence, investments in, inter alia, private equity funds, offshore funds, European or offshore domiciled hedge funds (including special funds: see below) fell into this category of investments. The new rules have not yet produced any significant changes to the asset allocation of insurers, but this may change over time.
Pension funds were, until the end of 2018, subject to Solvency I-based legislation and provisions, requiring that assets covering technical reserves are invested prudently, duly taking into account security (risk), diversification, liquidity and potential return. Further regulations contained specific quantitative investment restrictions for assets covering technical reserves. As of 1 January 2019, pension funds are subject to a Solvency II 'lite', with risk-sensitive capital requirements combined with investment freedom. The new rules are more complex than before, and while they may provide pension funds with more flexible rules to maximise returns and match their assets with their liabilities, they represent a high cost for the many small pension funds. Whether this may force a consolidation of smaller pension funds into larger entities, or an accelerated winding-down of defined benefit plans that such funds have traditionally offered, remains to be seen.
Pensions and their costs have become increasingly important subjects in public debate, in particular following the insolvency of Norwegian pension insurance company Silver Pensjonsforsikring AS, where the estate was bought by Storebrand. The bankruptcy was directly connected to obligations relating to closed pension schemes with defined benefits stemming from conversion to defined contribution schemes or where employees have left the relevant employer. Norwegian occupational pension rules were generally poorly adapted to the situation where employees have several employers throughout their career. The government has tried to remedy this with new rules on pension accounts for defined contribution schemes, whereby pension contributions are allocated to a personal account for each employee, with individual rights to transfer the account between offerors (also outside the insurer chosen by the employer).
ii Real property
There is no specific regulation of real property funds established in Norway (see Section II). Such funds typically fall outside current investment fund regulation (as they normally are closed-ended).
Norwegian real property funds are typically unlisted private limited companies, but public companies also exist.14 The sale of shares in such companies will be subject to public offering rules, and services related to such shares (e.g., brokerage services) are investment services subject to the ST Act, unless the fund in question is established as a limited partnership.
The management and marketing of real property funds are regulated by the AIF Act. Additional requirements concerning marketing to non-professional investors, requiring that managers are authorised under the AIFMD, has led to changes in governance for funds directed at such investor categories. Specifically, management is now typically undertaken by an external and authorised manager.
iii Hedge funds
Prior to July 2010, the establishment and marketing of mutual funds that employed investment strategies similar to those used by funds regularly referred to as hedge funds were not allowed in (or into) Norway. As of 1 July 2010, amended legislation was enacted that allowed the establishment and marketing of such funds to investors qualifying as professional clients under the ST Act (both per se and elective professional clients). These rules essentially widened the scope of the IF Act to include mutual funds with investment strategies typical of hedge funds. The IF Act refers to this category of funds as special funds, and both the management and marketing of shares in such funds are regulated under the IF Act. This means that special funds are subject to regulation based on the UCITS rules, but with wide exemptions concerning investment strategies.
Special funds established in Norway may only be managed by management companies authorised under the IF Act, or foreign management companies authorised under equivalent rules in their home state. In practice, only management companies established in another EEA Member State will be eligible. Managers exceeding the threshold values of the AIF Act (€100 million or €500 million under management) must be authorised in accordance with the AIF Act (or local legislation implementing the AIFMD).
The marketing of shares in hedge funds to professional investors is (for above-threshold managers) subject to the provisions of the AIF Act. It may be noted that the FSAN has held that the marketing rules of the IF Act apply to marketing of such funds. The rules are, however, substantively similar. Different marketing rules apply depending on the jurisdiction of establishment of the fund and the AIFM.
Sub-threshold managers may market shares in hedge funds pursuant to the rules of the IF Act. This requires prior authorisation from the FSAN, and such authorisation may only be granted if, inter alia, an agreement on supervision has been entered into between Norway and the home state of the manager of the foreign special fund, and the foreign special fund and its manager are subject to home state regulation that grants investors in Norway protection at least on par with that offered by the IF Act. In practice, authorisation may only be obtained if the manager is subject to AIFM-level regulation.
iv Private equity
There is no specific regulation of private equity funds in Norway (see Section II). Such funds typically fall outside the current fund regulation (as they normally are closed-ended). However, the management and marketing of such funds is now regulated in the AIF Act.
Norwegian private equity funds have traditionally been organised according to the typical private equity fund organisation, consisting of a fund and an adviser. The fund will then be organised as a Norwegian partnership, silent limited partnership or similar foreign entity (e.g., Guernsey or Jersey limited partnership). The AIF Act, implementing the AIFMD, relies on a different system, whereby the fund is expected to have one single manager responsible for both risk management and portfolio management, the latter including taking investment decisions on behalf of the fund. This has required some adaptations for Norwegian sponsors to comply with the AIF Act, while still offering investors a model they are used to. Certain advisers have chosen to offshore their operations in order to avoid changes.
v Other sectors
Other than what has been described above, there is no other general regulation of asset management activity in Norway, with the exception of individual portfolio management, which is an investment service subject to the ST Act. With the implementation of the AIFMD, one relatively common investment product has received added regulatory scrutiny, namely project finance or syndicated projects.
Project finance has been a traditional product in the Norwegian investment market, attracting investors to invest in special purpose vehicles holding typically one or a few capital-intensive assets, often called single asset funds. The management and marketing of funds not falling within the IF Act had been unregulated in Norway prior to the advent of the AIF Act. Consequently, there have been few regulatory concerns. In May 2019, the FSAN issued a circular in which it clarified that it considered most typical project finance and syndicated investments to fall within the definition of an 'alternative investment fund'. This means that the special purpose vehicle must appoint a manager that is either registered or authorised. Further, marketing of alternative investment funds to non-professional investors may only be done with prior authorisation from the FSAN. This may produce a decrease in products offered in the retail segment until the relevant actors have obtained the necessary approvals and completed any reorganisations that may be required. FSAN scrutiny may also mean that some products with inappropriate risk-reward profiles are denied marketing authorisation.
The Government Pension Fund Global: the Petroleum Fund
The Petroleum Fund is a sovereign wealth fund established on the basis of a special act.15 As such, it is not a fund in the traditional sense, but a body of assets owned by the government and deposited in an account with the Central Bank of Norway. Further, it is not a pension fund in the traditional sense; it is not liable to earmarked payments, but is rather a tool for government savings and value preservation.
There is broad political consensus concerning an 'action rule' on the use of the state's income from oil extraction. This action rule sets out that the annual use of funds from such income shall not exceed an estimated return on the investment of the fund. For several years this has been set to 4 per cent of the value of the fund, but was lowered to 3 per cent in 2017, as returns over time have been lower than 4 per cent. The object of the action rule is to avoid macroeconomic stress and inflation in Norway as a result of excess public spending. Although a political majority may choose to reorganise or liquidate the Petroleum Fund in part or in whole, the curbed spending of income from oil and the current organisational model of placing the state's income from oil extraction in the Fund are subject to broad political consensus.
The management of the Fund is delegated to the Ministry of Finance, which has in turn delegated its duties to the Central Bank via a regulation.16 The Fund is managed by a department of the Central Bank called Norges Bank Investment Management (NBIM). On 23 June 2017, a working group headed by a former chair of the Central Bank delivered its report assessing the Central Bank Act and the organisation of the management of the Petroleum Fund. The working group proposed spinning off NBIM into a separate company (to be wholly owned by the government) in order to separate the Central Bank from the management of the Petroleum Fund. The government, however, chose not to propose any substantive changes to the current model, whereby the management of the fund is carried out by an internal departement. The question of the governance and supervision of the Fund are also likely to be a question going forward, irrespective of whether the Fund should grow (by deposits or profits), or decrease (through consumption or in particular underperformance).
The Ministry of Finance has appointed a strategy council to advise on the investment strategy of the Fund. Further, the Ministry has adopted ethical guidelines for the Fund, and an ethics council has been appointed.
The investment mandate of the Petroleum Fund has been under continuous development. In December 2014, a committee appointed by the Ministry of Finance delivered a report concerning exclusion of oil and coal extraction from the investment universe of the Fund as a tool to combat climate change. This has also been linked to the more prosaic concern of delinking the Fund from exposure to the oil extraction industry, towards which the Norwegian economy is already broadly exposed. An expert committee proposed to exclude such shares in upstream companies from the investment universe of the Fund. This report is currently subject to a public consultation. In April 2016, the Ministry slightly changed the allocation of the fund to increase the maximum exposure to real estate (to 7 per cent). At the same time, the Ministry concluded that the investment universe should not be expanded to investments in infrastructure. The Petroleum Fund is prohibited from investing in Norway.
The Government Pension Fund Norway
The Government Pension Fund Norway constitutes part of the Government Pension Fund, and is based on the same act as the Petroleum Fund.17 As such, it is not a fund in the traditional sense, but a body of assets owned by the government that manages capital in its own name.
The mandate of the Fund is specified in a regulation.18 The capital can be placed in equity instruments taken up to trade in regulated marketplaces in Norway, Denmark, Finland and Sweden, and in interest-bearing instruments where the issuer is resident in Norway, Denmark, Finland or Sweden, or has equity capital taken up to trade in regulated market places in those countries. The Government Pension Fund Norway owns approximately 5 per cent of the market value of the Norwegian stock market and 10 per cent of the main index on the Oslo Stock Exchange.
Argentum Fondsinvesteringer and Investinor
Argentum Fondsinvesteringer AS, an important government-owned private equity investor, has developed into a private equity actor in its own right by expanding from primary investments to co-investments with funds in which Argentum is an investor, and due to its relatively high investment activity in the secondary market. Argentum has also established investment programmes whereby other investors are invited to invest alongside Argentum. The value of its investment portfolio at the end of 2017 was 7.6 billion kroner, marking the best ever results of that company with 1.6 billion kroner in profits.
Investinor AS was established by the government as an investment fund to invest directly in Norwegian businesses with essentially a venture fund investment strategy, investing in the early growth and expansion stage of such businesses. Investinor is the largest investor in the Norwegian venture and expansion market, managing, as at the end of 2018, approximately 4.2 billion kroner.
Taxation under Norwegian tax law of collective investment schemes will depend on whether the scheme is regarded as opaque or transparent for tax purposes. Mutual funds are not tax-transparent, while private equity funds are either organised as tax-transparent entities (silent partnerships or similar) or opaque entities (limited liability companies). Tax transparency implies that the fund is not a separate taxpayer, and that the investors are taxed directly on the profits of the fund.
The rules concerning taxation of mutual funds were changed with effect from the 2016 tax year. The previous rules resulted in non-Norwegian 'combination funds' (funds investing both in equities and fixed income instruments) being a tax-favourable alternative for Norwegian investors. The new rules aim at neutralising the favourable tax treatment of foreign combination funds. Under the new rules, all mutual funds shall be treated equally for Norwegian tax purposes. All types of mutual funds shall be subject to the tax exemption method, but the taxation of investors will depend on the actual allocation of a fund's portfolio of equity investments and fixed income investments. The rules imply that investors will not be subject to taxation on a running basis, but only upon distribution or realisation, or both, as under the previous rules.
With respect to taxation of Norwegian investors, the rules imply that distributions from mutual funds with an equities portion higher than 80 per cent are taxed as share distributions in full (at a rate of 0.66 per cent for corporate investors and 31.68 per cent for individual investors on distributions that exceed a tax-free allowance). Distributions from mutual funds with an equities portion lower than 20 per cent are taxed fully as interest income (at a flat rate of 22 per cent for both corporate and individual investors). Distributions from mutual funds with an equities portion between 20 and 80 per cent are divided into one part that is taxed as share distribution and one part that is taxed as interest, calculated proportionally based on the value of the fund's equities portion compared with the total value of the fund at 1 January of the relevant income year (where cash is excluded from the fund's total value). The simplified rule for determining the fund's equities portion applies correspondingly for the taxation of any gain upon realisation, however, so that only the equities portion in the year of purchase and the year of realisation is relevant.
The proportion of equity investments of a fund must be reported to the Norwegian tax authorities. Foreign funds will not have an automatic reporting obligation, but can report voluntarily. If not, the reporting obligation lies with the Norwegian investors. Failing to provide sufficient documentation implies that distributions and gains will be fully taxed as interest income.
Non-Norwegian investors in Norwegian mutual funds and private equity funds organised as opaque entities are only taxable in Norway on any distribution of dividends from the fund (Norway does not currently impose withholding tax on capital gains and interest income). The domestic tax rate is 25 per cent, but is reduced to 15 per cent (or lower) in most tax treaties. In addition, corporate investors resident in the EU or EEA may be exempt from dividend withholding tax under specific rules.
Non-Norwegian investors in Norwegian private equity funds organised as tax-transparent entities may have tax liability in Norway for a fund's income (irrespective of whether the income of the fund is distributed to the investors or not) due to participation in a business being managed from Norway. However, for corporate investors, capital gains on shares are as a main rule tax-exempt, while dividends are as a main rule taxed at an effective rate of 0.66 per cent. The same 0.66 per cent tax rate also applies to distributions from a private equity fund to corporate investors.
Norwegian asset managers (and other financial sector undertakings) are subject to a 'financial sector tax', effective as of 2017, originally as a result of the long-standing discussion of introducing VAT on financial services.
i Regulatory waiting game
The Norwegian asset management industry (and indirectly investors, both Norwegian and foreign) has been affected by the delay in implementing EU asset management and securities legislation. Tellingly, EMIR entered into force in Norway on 1 July 2017, several years later than in the EU. Neither the revised EU Transparency Directive nor the updated market abuse rules of the EU Market Abuse Regulation have been implemented or incorporated into the EEA Agreement. As the regulations concerning EuVECA, EuSEF and ELTIF funds have not yet been implemented, Norwegian fund managers have not been able to pursue these opportunities yet. As providing loans is a regulated activity in Norway, these new fund types may have a particular use under Norwegian law, providing managers with greater flexibility in their investment activity in the unlisted markets. For managers of open-ended funds investing essentially in listed markets, there is uncertainty as to the impact of MiFID II in terms of costs and benefits. The new rules on inducements under MiFID II may also affect asset managers in terms of how they distribute funds in a cost-effective manner.
For asset managers active in the retail markets the impact of the PRIIPs Regulation may introduce increased competition and cost transparency. It remains to be seen whether the increased transparency will also affect the marketability of different segment (and higher cost) funds in the retail markets, and whether this transparency will also affect the approach of institutional investors, especially smaller institutional investors that are not large enough to directly influence costs of management.
Recent government initiatives in the retail segment may lead to increased inflows into mutual funds: the rules concerning an 'equities savings account' for private individuals (see Section III) as well as rules for a new personal pension plan for private individuals with tax incentives. Increased focus on pension savings is likely to contribute to growth in these sectors. The regulator has also alluded to adopting rules for a mandatory key information document for pension products. Towards the end of 2018, approximately half of all assets in Norwegian equities mutual funds held by natural persons were held outside an equities account, and the transitional rule to transfer shares into such account has been extended by a year, to year-end 2019.
There are several underlying trends of increased use of delegation and possible offshoring among Norwegian asset management and financial services providers; necessary software solutions are increasingly migrating to 'cloud services', and may present a better value proposition for firms. The financial sector tax will increase costs for each Norwegian employee. This may be compounded by the expected strain – and necessarily reduced responsiveness – of the Norwegian regulatory authorities, who will be required to implement a quite large backlog of EU legislation into Norwegian law. It is uncertain how the future exit of the United Kingdom from the EU will affect the Norwegian asset management industry. The traditional close relationship and extensive trade between Norway and the UK lead us to believe that Norwegian authorities will strive to achieve a solution securing free trade to the greatest extent possible.
ii Nascent comparative advantages
Recent developments may provide Norway, as an asset management jurisdiction, with some advantages compared to neighbouring jurisdictions. These developments span from the general legislative landscape to tax law and regulator scrutiny.
The authorities have for some time endeavoured to simplify company law and the administrative burden of private companies. These measures are beginning to show results, with more flexible capital rules for limited liability companies and better online tools for establishing the legal entities necessary for an asset management structure. Increasingly, Norwegian asset managers establish Norwegian structures for co-investments that foreign and foreign institutional investors have accepted. Broader investor acceptance of Norwegian structures will likely provide for easier transitioning to such structures going forward.
Further, legal certainty for private equity managers has been strengthened following decisions by Norwegian courts that carried interest shall not be taxed as personal income, and that such amounts shall also be within the scope of the tax-exemption method, provided a beneficiary is sufficiently exposed to financial risk through his or her investment.
Finally, the Norwegian regulator has been both pragmatic and focused in its supervisory action in the asset management field. Case handling times have been relatively low, with reasonable documentation requirements, the regulator seemingly having focused on products in the retail segment. We do, however, expect that the regulator will intensify its review of AML measures in the sector going forward.
Provided the Norwegian legislature is able to keep pace with the EU in terms of transposition of EU law and securing passporting rights for Norwegian actors, Norway will be advantageous from a regulatory perspective as it relies solely on EU law and avoids gold-plating or other more stringent rules.
1 Peter Hammerich is a partner and Markus Heistad is an attorney at Advokatfirmaet BAHR AS.
2 Norwegian Venture Capital Association.
3 Norwegian Fund and Asset Management Association, Statistics Norway.
4 Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers.
5 FSAN statistics.
7 www.efta.int/about-efta/news/eea-efta-and-eu-ministers-reach-agreement-european-supervisory-
8 Mutual funds complying with Norwegian rules implementing EEA rules corresponding to Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to UCITS.
9 As defined in Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on Markets in Financial Instruments, implemented in the Norwegian Securities Trading Act.
10 Norwegian Fund and Asset Management Association annual statistics for 2016, 2017 and 2018. Institutional clients are defined as all non-retail clients.
12 Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance and Reinsurance.
13 Act on Insurance Activity No. 44 of 10 June 2005.
14 See, for example, Norwegian Property ASA, listed on the Oslo Stock Exchange.
15 Act No. 123 of 21 December 2005 on the Government Pension Fund.
16 Regulation No. 1414 of 8 November 2010.
17 Op. cit. 11.
18 Regulation No. 1790 of 21 December 2010.


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Choreographing the Rain of Light
Louvre Abu Dhabi: Dome
Abu Dhabi, UAE
Project details
The Tourist Development & Investment Company of Abu Dhabi (TDIC)
Ateliers Jean Nouvel (AJN), Pascall + Watson
2007 – 2017
Services provided by Buro Happold
Technology, Structural engineering, Sustainability, Transport and mobility, Water, Acoustics, Building services engineering (MEP), Design project management, Energy consulting, Facade engineering, Fire engineering, Ground engineering, Infrastructure, Inclusive design, Lighting design, People movement
Pritzker Prize award winning architect Jean Nouvel had a vision to create a unique 'rain of light' under the dome of Louvre Abu Dhabi.
The objective was to create a complex filter of the intensely bright desert sun, to create a dancing interplay between light and shadow around the galleries, plazas and reflecting pools.
Over the course of the ten year project, Buro Happold worked side by side with Jean Nouvel and his team in Paris, as well as on site in Abu Dhabi. The complexity of engineering the 'rain of light' was monumental, and the ever-changing dappled effect of light under the dome of Louvre Abu Dhabi, is truly dazzling and never fails to deliver a sense of awe.
Execution of Louvre Abu Dhabi dome was one of the most complex projects ever undertaken. Creating the intricately latticed roof entailed years of thorough research and testing. The result is a nine layered dome, with four cladding tiers of specially designed and interconnected stars above, as well as below, a 5m deep steel support structure. Each tier of stars has a different scaling, density and rotation. There are more than 400,000 individual components which translates to a 7,500 tonne, 180m dome, comprised of 7,850 individually sized stars.
Construction of the dome took two years and entailed a tremendous amount of planning and engineering. Each of the 7,850 stars, which varied in size and composition, had a unique placement in the dome. The inner and outer layers of cladding where installed at the same time in the interest of speed and cost savings. Cranes were used to lift the stars in place on the outer layers, however scaffolding was required for the inner layers, which at times involved hoisting weights in excess of 1.3 tonnes
Buro Happold tracked the path of the desert sun over the museum site for 365 days to understand the characteristics and exact angles of light. Subsequently the teams built a true to scale model of a section of the dome to test various design proposals to determine the best configuration of geometric elements and materials to use, to create the right temperatures, levels of light and shade, as well as orchestrate the dynamic 'rain of light' as envisaged by the architect. This step took five years of intensive study and testing, employing a wide variety software tools, technology and methodologies.
The dome is open to the elements, and it was important to have more natural light directed over the galleries, with more shadow over the pools and public walkways. Special glass was installed in the windows and ceilings of the galleries to ensure the artwork would be protected from the damaging effects of direct sunlight. There are three layers of blinds built into the glass – two diffusers and one black out blind. The blinds operate automatically depending on the time of day, time of year and how much sun light is present.
Sunlight passes through all eight layers of the cladding. However, to achieve the dancing rain effect, each possible path of light was carefully calculated and redirected. The stars, which are composed of aluminium and steel, are purposely built in slim, medium, wide and mixed dimensions of thickness to guide the streams of light. The sun's rays initially pass through two openings in the dome, before being blocked by a third layer. However the ray of light soon travels on as the position of the sun changes and the reflective elements of the cladding finishes redirect the light within the museum complex. Thus the 'taches de lumiere' or spots of sunlight appear, disappear, grow in size, or diminish, shimmering over the walls, floors and pools. Through years of hard work and exacting science we have created new lighting effects that have never been realised before.
The motto of Louvre Abu Dhabi is: 'see humanity in a new light.' Our work on this project inspired and challenged Buro Happold in new and exciting ways. We are privileged to have helped create an extraordinary museum complex that will benefit the community and all those that come to visit the rare collection of art. Honoured to help engineer the vision of humanity in a new light.


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I did not include the Starlight Rose Glow Booster CC Serum from By Terry in my 2019 makeup favorites because I got to try it so late into the year. However, I have been using it since 2020 started to give my fave a subtle yet healthy glow.
This primer brightens while hydrating the skin using rosehip butter, moonstone extract, and gemstone pearls. It looks creamy from the bottle but it applies lightly to the skin, providing a thin almost unnoticeable canvas before the foundation.
For my oily skin, I apply a mattifying primer before putting six little dots of this all over my face. I then buff this with my stick foundation. It brightens my skin and doesn't leave too matte. It just makes me look like I had eight hours of sleep like I only eat fruits and vegetables. That's how healthy this makes me look. If I want a little bit more glow, I also put this on the high points of my face and my lids after applying foundation.
To really up the ante, I use the Starlight Rose CC Powder on my lids and on my cheekbones. This illuminating powder has that provides a lot of shimmers. This is not for the faint of heart, not for those with a lot of texture either. I have on my cheeks so I really have to be careful when applying this. However, if I'm looking for impact, this is what I really go for.
For a big day, I use the Starlight Rose Baume de Rose Flaconnette Liquid Lip Balm before applying my makeup.
It contains rose blossom essential wax, shea butter, vitamin e, ceramides, and hyaluronic acid microspheres to combat dryness and strengthen, protect, and hydrate the lips. I have been using this before applying matte lipsticks to protect my lips and keep it from drying.
The By Terry Starlight Rose Glow Booster CC Serum, Starlight Rose CC Powder, Starlight Rose Baume de Rose Flaconnette Liquid Lip Balm were provided by @byterry. Available at byterry.com


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I think I'm in an abusive relationship with Alexa | Emma Brockes | Robotics
"Alexa, how are you feeling?" I said to my Amazon Echo this week, partly out of curiosity, and partly to model for my kids how we can still be nice to things that don't have feelings. Alexa's light bar twinkled like Knight Rider's sentient car, Kitt. "I'm fine, how are you?" she answered flatly. When I repeated the question, just to see what this baby could do, she said, marginally less sullenly: "Great! Ready to help."
The thing about robots is that, as per the creepy Joaquin Phoenix movie, Her, they imperil us by generating emotions
I am two weeks into owning the Echo and so far I like it a lot. Voice-activated devices are supposed to be ruining our children, teaching them to bark out demands without saying please, but on the upside, Alexa forces them to speak very clearly. Hearing my three-year-olds focus to within an inch of their lives while enunciating the words "Alexa, play A Spoonful of Sugar by Julie Andrews" has been worth the sticker price alone ("Alexa, play boo-boo butt poopy-diarrhoea [hysterical laughter]" has felt less like a win).
The main thing about robots and voice-activation software in general is that, as per the creepy Joaquin Phoenix movie Her, they imperil us by generating actual emotions: in my case, fooling me into bonding with a 10in-high cylindrical speaker. It's true that a few years ago, when I first bought a Roomba robotic vacuum cleaner, I was inclined to apologise to it when I got in its way. It's also true that when Alexa's perimeter flashes red to indicate poor signal health, I feel a surge of emotion.
The problem is not the emotion itself, nor the anthropomorphising of an inanimate object; I can look at the spine of a book and feel my heart leap, just as a child can remove two salt and vinegar crisps from a packet and enthusiastically make them converse.
Instead, the problem with Alexa is that the overwhelming emotion it generates is negative. When it's working, it's invisible. But it is subject to frequent glitches, at which point one starts to take Alexa more personally. More than once in the last fortnight I have found myself yelling, much louder than the receptivity of the speaker requires: "Alexa, play BBC Radio 4," followed by: "What is wrong with you?"
It has had the same effect on my kids. A visitor to my apartment, wanting to test out Alexa's range, asked her to play an obscure local UK radio station, which she seamlessly did – and then it promptly got stuck on. "Alexa, stop!" said my daughter, later that day, apparently uninterested in news of train delays in North Yorkshire. Alexa didn't stop. "Alexa, stop!" she repeated. At the third, ignored directive there were baffled tears.
"She's not listening," I said, and realised this was not the right response. "It's a computer, like the phone. There must be a signal problem." There are so many positives to the Echo: my kids can play music without interfacing with a screen, or breaking in half yet another CD; I can travel much further in my listening habits than I would with a more hands-on device. But as I hear my family snap, growl and cry at the cone in the corner, it seems possible that the cost is a mildly abusive relationship.
• Emma Brockes is a Guardian columnist