Norway’s Government Pension Fund Global was hardly a minnow in 2000 when it showed up in the IPE Top 1000 European Pension Funds ranking in fourth position with €21bn to its name. Now with assets approaching €600bn, it is the third-largest institutional investor in the world, after Japan’s Government Pension Fund and China’s SAFE.

Funds like Norway’s move in an elite group of super sovereign wealth entities. As managers of their countries’ patrimony, all are expected to produce acceptable returns. Jin Liqun, chairman of the board of supervisors of the China Investment Corporation, has said that the fund is under intense high-level political pressure to produce good returns in the short run, with the implication that it has not managed to achieve this with all its investments.

Unlike most of its super sovereign wealth counterparts, the Norwegian fund is highly transparent, with a high level of accountability. In 2001 the fund created a Council of Ethics and International Law and undertook a programme of corporate exclusions. This year, the strategy council has been commissioned to report on the fund’s overall responsible investment strategy.

Norway’s press and politicians have been correspondingly rigorous in their scrutiny of the management of their country’s sovereign wealth, and critics have been at their shrillest following periods of negative returns.

Understandably, as the fund hurtles up the league of institutional investors, its future became a topic of debate prior to Norway’s national election in September. Among the ideas aired were proposals to hive off the real estate portfolio and move some of the investment functions to Trondheim. But the most drastic was a plan from the victorious Conservatives to split the fund into two, ostensibly to foster a degree of healthy competition between two similarly sized portfolios.

It is certainly true that size decreases investment flexibility and the investment milestones of a supertanker like Norway’s fund have been relatively cautious – with new benchmarks in 2012 and only the addition of small caps and real estate in the past six years. Notably, it took three years from the decision in principle to include property to the time of the first investment.

But two funds would not necessarily be more effective asset diversifiers, given the rapid growth rate of Norway’s petroleum assets. Two funds might initially be marginally more nimble than one, but their nimbleness would diminish rapidly as assets continued to grow.

Large funds like Norway’s are never likely to achieve true broad asset class diversification. They are more likely to shine in their application of sound long-term investment principles with a keen eye on the way they manage and allocate risk.