Norway SWF in perspective after election

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Norway’s just concluded general election is likely to lead to a Conservative Party led coalition, with concerns raised about a possibly change in policy regarding the country’s giant sovereign wealth fund.

The Pension Fund Global, funded by the country’s oil and gas sector, is worth some NOK4.55trn (€577bn) according to the calculator visible on the website of Norgest Bank Investment Management, the manager of the fund, which answers to the country’s finance ministry and Parliament. Other calculations estimate that the fund owns the equivalent of more than 1% of every listed company in the world.

The fund has benefited over the past year, as gas exports from Norway surpassed those of Russia to become the biggest exporter to the EU.

The fund has been branching out into property assets. Yesterday it announced a $684m deal to buy 45% of Times Square Tower in New York from Boston Properties.

However, some of the junior coalition partners to be have raised the prospect of using more of this wealth to fund spending on education and other areas of the economy – at a time when near-full employment is creating an interest rate headache for the Norwegian central bank.

Ahead of the election, one incumbent minister reportedly proposed that the property assets of NBIM be split from the fixed income assets, as part of what may have been pre-election positioning.

NBIM reported a negative return from fixed income investments through the second quarter of 2013, while equity and property investments made positive returns.

 

 

 

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