NORWAY - Karsten Kallevig is to manage the planned NOK140bn (€16.6bn) property portfolio of the €346bn Norwegian Global Pension Fund. The Tokyo-based partner in real estate private equity firm Grove will join the fund early in September.

The likely size of the real estate team is still unclear, though communications director Siv Meisingseth said that Kallevig would begin in the summer to add more people to the currently 10-strong, London-based property team. "It's up to him to identify the need," she said.

The 5% real estate mandate, awarded in March, stipulated significant constraints on the proposed allocation: it will be indexed, geographically diversified, and via non-listed funds invested in mature markets and traditional sectors.

However, some analysts have doubted that the scheme's size will allow it to stay within these limits for long. Elroy Dimson, professor emeritus at London Business School, who advised on the fund's real estate strategy, claimed the scheme would have little choice but to move into direct because of its size.

However, he added that what amounts to a cult of transparency in the Norwegian market would not allow it to invest in risky asset classes. 

Meisingseth today denied the fact that Kallevig was based in Asia since 2006 was significant. The scheme announced last week that it was to add an office in Singapore to an existing one in Shanghai. Around 10% of the fund is invested in Asian markets.

 "We're still looking to invest in Europe, especially UK, real estate," she said. "We employed Kallevig because he has a solid international experience - not specifically for his experience in the Asian market."

Paul Golding, ex-head of Merrill Lynch's real estate investment banking for Europe and the Middle East, who was also in the running for the real estate management job, did not respond to requests for comment on the appointment - nor on his post-September plans.