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Norway’s SWF mulls private equity

The country’s finance ministry will consider whether its $871bn Government Pension Fund Global can invest in the asset class via funds or directly.

Norway’s Government Pension Fund Global (GPFG), the world’s largest sovereign wealth fund, will consider investing in private equity on a “general basis”, according to a white paper released at the end of March.

The $871 billion fund is currently prohibited from making investments in unlisted equities. This will be reviewed before next March, the paper, The Management of the Government Pension Fund in 2016, noted.

Norway’s finance ministry, which sets the GPFG’s mandate, will consider allowing the fund to invest in unlisted equities either directly or via private equity funds, Tore Vamraak, Norway’s deputy finance minister, told Reuters on 31 March. A finance ministry spokeswoman confirmed this position to Private Equity International.

As of 31 December the Fund allocated 62.5 percent of its portfolio to equities, 34.3 percent to fixed income and 3.2 percent to real estate, according to its website.

The white paper also noted the ministry has ruled out allowing GPFG to invest in unlisted infrastructure, citing high transaction costs, lower liquidity and complex political risk among its reasons for rejecting the asset class. Despite this, the Norwegian parliament is set to vote on a proposal this summer, which would allow up to 5 percent of the fund’s portfolio to invest in unlisted infrastructure.