Norway wealth fund positive on unlisted equity review

Norway’s $1.4 trillion sovereign wealth fund welcomed a government request to invest in unlisted equities on Tuesday and said it will make a recommendation by December.

Last month, the Norwegian Finance Ministry requested the world’s largest stock market investor to consider investing in unlisted securities.

Due to the possibility of being unable to divest, successive Norwegian governments had barred the fund from investing in that asset class.

The fund, managed by Norway’s central bank, controls 1.5% of global listed shares in 9,200 businesses.

The fund invests the Norwegian state’s oil income in equities, bonds, real estate, and renewable energy initiatives.

“Norges Bank looks positively on this review, and we will return with our advice and assessments towards the end of the year,” central bank governor Ida Wolden Bache told a parliamentary committee on Tuesday.

CEO Nicolai Tangen told Reuters that the fund can only invest in a private company if it is soon to be listed, which risks missing out.

Much value creation has already occurred. “We want to create value,” Tangen remarked.

Tangen told the Senate panel that private equity investing was more transparent.

Transparency has improved. “All big comparable funds are fairly heavily invested in this (segment),” he said.

“The reputation risk in private equity is actually lower compared to how we are set up now,” Tangen said, adding that such investments might offer large extra returns.