The asset size of the Norwegian Government Pension Fund – Global, which is approaching the nation's gross domestic product, ballooned in 2005 to make it the third largest pool of assets in the world.
The Oslo-based fund returned 11.1% on its investments for the year ended Dec. 31, boosting total assets to 1.4 trillion kroner ($207.4 billion) and edging past the California Public Employees' Retirement System, Sacramento, which had $200.9 billion in assets as the same date, for the No. 3 slot. The two largest funds are Japan's Government Pension Investment Fund, Tokyo, with $1.06 trillion in assets as of March 31, and Stichting Pensioenfonds ABP, Heerlen, Netherlands, with €90.7 billion ($231 billion) in assets as of Dec. 31.
The Norwegian fund's 383 billion kroner increase for 2005 includes a 220 billion kroner government transfer of surplus capital from high oil prices in the past year, according to its annual report, released Feb. 28. (Norway is the world's third largest exporter of oil behind Saudi Arabia and Russia.)
Investment returns accounted for another 127 billion kroner of the increase, and currency movements added 36 billion kroner to the portfolio, which is 40% in equities and 60% in bonds, mostly in overseas markets. Equities returned 22.5%, and bonds returned 3.8%, the report said.