Norway's Ministry of Finance asked Norges Bank Investment Management, which manages the assets of Norway's sovereign wealth fund, to consider more investments in private assets.
The ministry asked the bank in a letter March 27 to examine "various aspects of unlisted equities," as a basis for the ministry's further consideration to potentially expand the investment mandate of Government Pension Fund Global, Oslo, which has 14.14 trillion Norwegian kroner ($1.35 trillion) in assets.
GPFG currently invests in private real estate and private renewable energy infrastructure, but it is generally not permitted to invest in private equity. Private real estate is 2.7% of the sovereign wealth fund's assets, while private renewable energy infrastructure is 0.1% of its assets.
In a white paper to the Norwegian Parliament, the ministry said that amid increasing inflation and tightening of monetary policies globally the Government Pension Fund Global and the Government Pension Fund Norway's investment returns in 2022 at -14.1% and -4.4%, respectively, were still 87 and 71 basis points above — the benchmark set by the ministry.
"We have seen a strong increase in the value of the fund over several years but have no guarantee that this will continue," said Trygve Slagsvold Vedum, Norway's minister of finance, in a news release March 30.
The ministry also concluded that the performance of the 318 billion kroner Government Pension Fund Norway, which invests in Norway, has been good overall, and that the fund should continue to be managed actively.
A spokeswoman could not be reached to provide further details.