(March 16, 2012) — Europe’s largest asset pool, the Norway Pension Fund Global, voted against the plan to restructure Greece’s debt that would allow it to avoid a default, it revealed today. The fund, which was worth $606 billion at the end of 2011, voiced its opposition to the plan that would see holders of the beleaguered country’s sovereign debt agree to a substantial ‘haircut’ or loss on their investment, Reuters reported this morning.
Yngve Slyngstad, Chief Executive of Norges Bank Investment Management, the central bank body that manages the fund, said the organisation would have preferred a solution that treated all bondholders equally.
“We voted no based on a principle basis,” he told reporters in Oslo this morning, Reuters said. “As a long-term investor, we believe it is important to stick to principles.”
He said the Greek bailout plan would not treat all investors equally, and that the European Central Bank had retroactively received preferential treatment.
Slyngstad revealed that the fund had lost 2.5% – equivalent to $14.85 billion – in 2011, with an 8.8% drop coming in the final quarter of the year. The fund holds large amounts of property investments, the performance offset the 4.4% made on its stock and bond portfolio in the last three months of the year.
The fund invested NOK150 billion ($25.6 billion) in European equities in the second half of the year.
“Because more than half of the fund is invested in Europe, it is of great importance to us that authorities are successful in solving the considerable structural and monetary challenges faced by the euro countries,” Slyngstad said in a statement.