Norway needs to review its $740 billion sovereign wealth fund to find a more competitive model that will boost returns, according to the head of the opposition bloc leading in polls ahead of elections next month.
The investments “might be too big to be handled by just one fund,” Erna Solberg, leader of the Conservative Party, said in an interview in Oslo. Most polls show Ms. Solberg will oust Labor leader Jens Stoltenberg to become prime minister after Sept. 9 elections. “You could split it either on getting different handlers to compete better, or have different objectives for your investments in different funds. We're going to explore it, develop and see if it's a good idea.”
“The structure has not been revised” since the fund was created in 1996, Ms. Solberg said. “We are a party that believes in competition. If you have different bodies running it, you will have a little bit more competition to see who gets the best results.”
The Government Pension Fund-Global, the oil fund's official name, returned 5.4% in the first three months of the year.
“It's all about one thing: increasing the return on our investments without taking more risks,” Ms. Solberg said. “We are long-term investors with the fund, we are not short-term profit seekers.”
The fund, which posted its second-best year in 2012, is shifting its strategy to capture more of global growth. It's moving asset allocation away from Europe as emerging markets in Asia and South America gain a bigger share of output. It's also retooling its bond portfolio to a gross domestic product weighting from a market weighting to avoid nations with growing debt burdens.
Norges Bank Investment management “doesn't comment on changes in the fund's structure,” Marthe Skaar, a communications adviser at the fund, said in an e-mail. “These questions should be directed to the Norwegian Ministry of Finance.”