Norway to Review Oil Fund's Equity Investment
08 Janvier 2016 - 8:00PM
Dow Jones News
OSLO—Norway's government ordered a review Friday to determine
whether the nation's sovereign-wealth fund should increase its
exposure to global equity markets in a bid to lift returns.
The move comes as the oil fund, managed by Norway's central
bank, considers slowing down the pace of its diversification into
real estate because it can't find enough attractive properties. The
fund is also suffering from a period of weak bond returns.
"We'll assess whether returns can be boosted by increasing the
share of equities and taking on more risk," Finance Ministry State
Secretary Paal Bjornestad said.
The review will be conducted by a nine-member committee chaired
by Handelsbanken senior economist Knut Anton Mork. It will include
former finance ministers Sigbjø rn Johnsen and Kristin Halvorsen
and will produce a report by October.
Because of the fund's sheer size—the world's biggest wealth fund
by assets, with a $820 billion portfolio—any change in its equity
mandate would have a global impact.
Under current rules, the fund invests 60% of its money in
shares. The balance goes to bonds, 35% and real estate, 5%.
But the question of whether the fund is too risk averse is also
a question closer to home.
"We've asked two former finance ministers to join the committee,
because the risk tolerance of the Norwegian people is partly a
political question," Mr. Bjornestad said.
After years of rapid growth, the fund—formally known as the
Government Pension Fund Global—has become a cornerstone of the
Norwegian economy. In 2016, 12.5% of government spending will be
derived from the fund, the value of which is more than twice the
size of Norway's yearly output.
The fund has changed its strategy several times before. After
its inception in 1996, it invested only in fixed income, but added
equities from 1998 and real estate from 2011.
During the financial crisis, when other investors off loaded
shares, the fund was a big buyer. As a result, it suffered huge
losses in 2008, but gained most of it back when markets rebounded
the following year. The fund came out of the financial crisis as
one of the world's biggest shareholders. At the end of 2014, it
held on average 1.3% of all global listed shares, including a 7%
stake in BlackRock, 2% in Royal Dutch Shell, and a 0.7% stake in
each of Apple, Microsoft and Exxon Mobil.
Changes to resource allocation must be approved by Norway's
Parliament. The government said it planned to conclude the process
in 2017, but any change to the fund's mandate could take years to
take full effect.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
(END) Dow Jones Newswires
January 08, 2016 13:45 ET (18:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Exxon Mobil (NYSE:XOM)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Exxon Mobil (NYSE:XOM)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024