Norway's $1.3 trillion sovereign wealth fund has recommended that the country should consider investing in unlisted equities in the longer term to boost returns.
While the fund isn't currently permitted to make such investments, "we're seeing more and more indications that a larger share of value creation is taking place in the unlisted market," Norges Bank Investment Management said in a letter to the Ministry of Finance, which was made public on Friday.
The number of listed companies worldwide has leveled off, NBIM said, while in developed markets such as the U.S., U.K. and euro-area, that number is in decline. On top of that, companies that do list now are generally older and larger than before, the fund manager said.
"These trends may mean that the fund misses out on an increasing share of companies' value creation by waiting until they are listed and eventually enter the fund's benchmark index," NBIM wrote in the letter, which was dated Jan. 5.
"It should be investigated whether the fund's investment strategy should reflect these trends, and whether unlisted equities in general should be included in the fund's investment universe."
It's not the first time the Oslo-based fund, which is the world's biggest single owner of shares, has asked for permission to make unlisted investments. In 2018, it said investing in private equity would boost returns, but later the same year, the idea was rejected by Norway's finance ministry.