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Sovereign Wealth Funds

Norwegian government rejects private equity investments for sovereign wealth fund

The Norwegian government won't allow the Government Pension Fund Global, Oslo, to invest in unlisted equities following a review of Norges Bank's management of the 8.5 trillion Norwegian kronor ($1.1 trillion) sovereign wealth fund.

In January, Norges Bank Investment Management, which runs the assets of the fund, asked the Ministry of Finance to allow private equity investments, arguing that "the risk associated with unlisted equity investments could be adequately constrained in the management mandate." Currently, Norges Bank only has a right to invest in unlisted companies that expressed an intention to conduct an initial public offering.

The Norwegian government also deemed unlisted infrastructure an unsuitable investment for the fund, it said in the review. However, a new review conducted in the near future could revisit that topic and also could determine whether unlisted renewable energy infrastructure investments should be a part of environment-related mandates.

The government is continuing to deliberate on whether it should allow the sovereign wealth fund to increase its allocation to equity to 70% from 66.6%.