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IPE special report May 2018

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Norwegian oil fund set to grow AUM by 20% in 2013

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The Norwegian Government Pension Fund Global (NPFG) is on track to increase its assets under management by NOK1trn (€123bn) in one year, according to revised government estimates.

Announcing its decision to amend the 2014 Budget introduced by its predecessor, the conservative coalition led by prime minister Erna Solberg said it would slightly increase the amount of money drawn down from the fund to balance the books.

However, the Ministry of Finance simultaneously predicted the GPFG would exceed NOK5.3trn by the end of 2014 and estimated that the fund’s assets under management would be above NOK4.8trn by the end of December, a 7% increase over predictions published by the previous Labour Party-led government in May.

If the predictions hold true, then the GPFG will have seen assets under management increase by more than one-fifth, or NOK1trn, in a year.

The fund has seen an uneven investment performance so far this year, returning 5.45% in the three months to January, followed by a 0.1% return on investments in the second quarter and a return to stronger growth in the third, led largely by a resurgent equity portfolio.

Announcing third-quarter results late last month, Norges Bank Investment Management chief executive Yngve Slyngstad credited the 7.6% return from its equity holdings to increased economic activity in China, but he noted that the remainder of its emerging market stocks continued to see weak growth.

The NPFG recently announced a review of its active management approach and also made its first investment into real estate debt, partnering with Axa Real Estate Investment Management.

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