Norwegian regulators have received eight applications to start or market hedge funds in the country as it lifted a ban Thursday on sales to institutional investors.
Five Norwegian firms are seeking to set up hedge funds while three foreign companies want to market funds in the country, Eirik Bunaes, deputy director general of the Financial Supervisory Authority, said in an interview in Oslo. He declined to name the companies.
“I expect gradual growth,” said Havard Gulbrandsen, CEO of KLP Kapitalforvaltning, which plans to shift its 1 billion kroner ($154 million) hedge fund business to Norway from Ireland. “We could see a few dozen funds in a year’s time.”
Norway’s bid to lure hedge funds comes as the U.S. and European Union step up regulation of an industry blamed by lawmakers for exacerbating the financial crisis. While Norway won’t allow sales to retail investors, there aren’t many restrictions on what hedge funds can invest in, Mr. Bunaes said.
“There is a limited market for hedge funds in Norway, especially when there are restrictions,” he said. “Too many restrictions on investments would be a handicap when competing internationally with other hedge funds.”
KLP Kapitalforvaltning, which manages assets of about 170 billion kroner and is part of Norwegian life insurer KLP, or Kommunal Landspensjonskasse, expects its application to set up hedge fund operations to take three to six months to process and aims to start selling within two months of getting approval.
EU finance ministers approved draft rules in May to tighten hedge fund regulations. In the U.S., hedge funds that manage more than $100 million will have to register with the SEC, subjecting them to audits, and to provide information on trades so authorities can assess systemic risk.