(May 22, 2014) — The world’s biggest sovereign wealth fund, the Norway Pension Fund—Global, is seeking to diversify into private equity and infrastructure.
The fund is lobbying the Norwegian government to allow it to allocate a portion of its $860 billion portfolio into the two asset classes, according to Bloomberg. It currently holds predominantly equities and fixed income, as well as a 5% position in real estate, overseen by Karsten Kallevig, CIO for real estate.
A spokesperson for the Norway Pension Fund could not be reached for comment at the time of going to press.
Speaking to aiCIO in 2012, Petter Johnsen, CIO for equities at the fund, talked of moving into “private investments” in “long-term, more illiquid positions”, a step on from the fund’s current ability to invest in listed companies and pre-IPO offers.
“There will be a change of emphasis in our investment ideas to take more advantage of being a large investor,” Johnsen said at the time.
Elroy Dimson, emeritus professor at London Business School and chairman of the fund’s investment strategy board, also said in 2012 that there was “no reason, in principle, why [the fund] cannot harvest an illiquidity premium from public equity”.
Johnsen said infrastructure had “attractive characteristics”, while Dimson added: “After moving 5% into real estate, the fund will have established the skill to look at and invest in illiquid assets—infrastructure could conceivably be the next step. However, there are so many people investing in it now, prices are very high.”
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