Norway’s Pension Giant Lost $215 Billion in First Three Quarters

Norway’s $1.17 trillion Government Pension Fund Global reported an investment loss of 4.4%, or 449 billion kroner ($42.18 billion) for the third quarter. After having already lost $173 billion in the first half of the year, the world’s second largest pension fund investment portfolio has seen nearly $215 billion in asset value vanish for the year to Sept. 30. [Source]

The fund’s portfolio was weighed down during the quarter by the performance of its equity investments, which lost 4.8%, while its fixed-income investments lost 3.9% during the same time. Renewable energy investments ended the quarter down 3.7%, while the fund’s investments in unlisted real estate lost 1.1%. Despite the loss, the pension fund edged out its benchmark’s performance by 0.14 percentage points

“The third quarter has been characterized by rising interest rates, high inflation, and war in Europe,” Norges Bank Investment Management Deputy CEO Trond Grande said in a statement. “This has also affected the markets. The return was negative for equities, fixed income, and unlisted real estate.”

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Norges Bank Investment Management, which manages the country’s sovereign wealth fund, said the the krone depreciated somewhat against several major currencies during the quarter, which contributed to an increase in the fund’s value by 702 billion kroner. In the third quarter, inflow into the fund totaled 306 billion kroner.

The fund had a value of 12,216 billion kroner as of Sept. 30, with the fund’s equity investments accounting for 8,344 billion kroner, while the market value of the fixed-income investments was 3,487 billion kroner. The unlisted real estate investments had a market value of 373 billion kroner and renewable energy infrastructure investments were worth13 billion kroner. As of the end of September, the fund’s asset allocation was 68.3% in equities, 28.5% in fixed income, 3.1% in unlisted real estate, and 0.1% in unlisted renewable energy infrastructure.

Norges also reported that the fund has five-, 10-, and 15-year annualized returns of 5.48%, 7.51%, and 5.51% respectively, and has annualized returns of 5.81% since its inception in 1998. [Source]