New Zealand's finance minister, Bill English, has written to the chief executives of the three big government-owned fund managers to ask them if they are taking on too much risk, which has raised concerns within the funds that the government wants them to buy fewer shares and more government bonds.Fears that the government funds would be directed to invest their NZ$27 billion into government bonds have surfaced in recent weeks as the government examines whether to direct the NZ Superannuation fund investments into certain areas closer to home. The pressure of heavy government bond issuance in coming years and a potential credit rating downgrade are also thought to weigh on the government, particularly in the wake of heavy losses on global stock markets.The NZ Debt Management Office announced yesterday the government will have to borrow NZ$1 billion more than expected over the next eight weeks.On Friday the NZDMO sold NZ$50 million each of November 2011, April 2013 and December 2017 bonds at average yields of 3.52 per cent, 4.27 per cent and 5.33 per cent, respectively. The issues were oversubscribed by 2.2, 6, and 3.2 times, respectively.English's office confirmed to interest.co.nz it had written to the CEOs of the ACC, the New Zealand Superannuation Fund and the Government Superannuation Fund and asked them for assessments of the levels of risk they were taking on."The government is keen to get a better understanding of its balance sheet and this is part of this process," a spokesman for English said."We're taking a more active look at the Crown's balance sheet as part of the overall public sector. It's not about directing the funds into certain asset classes," the spokesman said.However, sources within the funds told interest.co.nz there were concerns that the government wanted them to de-risk their portfolios, possibly by buying more government bonds."The request was for the boards (of the funds) to say what would be the minimum risk portfolio that would match their liabilities for that particular organisation," one source said.Another source said the letter had sparked a heated debate at the board level of one of these funds about whether the government wanted them to de-risk by buying government bonds.English's office denied there was a specific mandate to de-risk the portfolios of the government funds. It said the project was part of the overall plan to improve the Crown's balance sheet management. The three funds manage a combined NZ$27.4 billion in assets, including NZ$4 billion in the Government Superannuation Fund (which provides pensions for public servants), NZ$11.5 billion in the New Zealand Superannuation Fund (sometimes known as the Cullen Fund) and NZ$11.9 billion in the Accident Compensation Corporation.All have been hit hard by the downturn on global stock markets. The government's accounts to the end of February show the value of its shares in the various funds was NZ$10.45 billion, which was 27 per cent or NZ$3.9 billion below its forecasts.The ACC fund's losses were a major factor in the decision to increase charges for the accident insurance scheme.The