Sunday, July 10, 2011

Norway Goes Continental

The buzz in Norwegian newspapers this week is that Norway is now investing in some upscale properties in France and England. Why would the Norwegian government be buying up properties on Paris's Champs-Élysées or London's Regent Street? Because the managers of Norway's mammoth oil fund recently got permission to invest as much as 5 percent of its total assets in real estate.

The fund, officially known as the Government Pension Fund Global, has a current value of around NOK 135 billion (approx. USD 25 billion), and in June was named the largest sovereign wealth fund in the world. As of March, the fund had invested only 0.1 percent of its assets in real estate, according to an article from News and Views from Norway. This means the country is in the market for more property, and the article predicts Germany's largest cities are also considered prime real estate by fund managers.

Since the goal of the fund is to spread risk by diversifying the country's wealth, current law requires all but 4 percent of its value be invested outside of Norway. Some Norwegians disapprove of this policy, and would like to see more of the money spent on Norwegian infrastructure, education, research and tax relief.

To read more about Norway's ongoing oil fund debate, look for Jack Gordon's feature story in the upcoming August issue of Viking!

Amy Boxrud is editor of Viking magazine. She lives with her family in Northfield, Minn., where she’s a member of Nordmarka 1-58.

Photo courtesy of Flickr user Enzo Ferrante.

1 comment:

Brovig said...

You say that the Norwegian Government Pension fund is now at $25 billion. The figure is in fact considerably more. At the end of March it was 3,102 billion kroner, or ca $570 billion. You can see the details here: