US property investment helps Norway’s oil fund hit all-time peak of $800 billion

Norwegian oil fund Chief Executive Yngve Slyngstad
Norwegian oil fund Chief Executive Yngve Slyngstad

The latest annual report released by the Norwegian government show that its Sovereign Wealth Fund (SWF) – also known as the Government Pension Fund Global (GPFG) – passed the NOK 5000bn mark for the first time.

This means that the value of Norway’s sovereign oil fund – the biggest national pension fund in the world – is NOK 5038bn (about $838.88bn)

The Fund is managed by Norges Bank Investment Management (NBIM) and Chief Executive Yngve Slyngstad said: “It’s been a good year.”

He added: “The real return was 14.3% in 2013. It’s significantly above our long-term goal of 4%. It has been 4% in the last 10years.

“The year’s results were driven by equity investments. Despite various sources of uncertainty in the global economy, stock markets made broad gains in 2013.”

“The fund’s market value grew by more than NOK 1,200 billion during the year to NOK 5,038 billion. The return for the year was NOK 692 billion, NOK 239 billion in new capital was transferred from the government, and a weaker krone increased the value of the fund in krone terms by NOK 291 billion.

“The fund made its first property purchases in the US in 2013. Investments in real estate will increase substantially in the coming years, and we have strengthened our organisation over the past year with this in mind.”

Equity investments returned 26.3%, fixed-income investments produced a zero return, and real estate investments returned 11.8%. The return was 1.0$ point higher than on the benchmark indices the fund is measured against.

The fund’s asset allocation was 61.7% equities, 37.3% fixed income and 1.0% real estate. In addition to its head office in Oslo, NBIM also has offices in London, New York, Shanghai and Singapore.

A staff of 370 people manage the Norwegian oil wealth – with a mission ‘to create returns for the Norwegian people and ensure that it is achieved in a responsible manner.’

* In its Independence White Paper published last year, the Scottish Government confirmed it would create a Scottish sovereign oil wealth fund under an SNP government.

 

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