Norway Knocks Off Abu Dhabi as World’s Largest SWF

(November 6, 2012) — Norway’s US$656.2 billion sovereign wealth fund (SWF) now has more assets under management than the $627 billion Abu Dhabi Investment Authority (ADIA), making the Norway Pension Fund-Global the world’s largest SWF. 

China takes two of the top five spots. Hong Kong’s State Administration of Foreign Exchange Investment Company is third with $567.9 billion, although this is a “best guess estimate” as the fund doesn’t release the figure. The smaller (but more transparent) China Investment Corporation comes in at number five, holding assets worth $482 billion. 

Norges Bank Investment Management, which manages the SWF fund, posted fairly strong 4.7% returns for the third quarter of 2012, rising in value by $29 billion. “The result was largely driven by a rally in global stock markets,” said Yngve Slyngstad, chief executive officer of the managing body. “Stocks gained the most in Europe, where the fund has about half of its shareholdings.” 

The fund’s equity investments—including allocations to German chemical producer BASF SE and US technology companies Apple Inc. and Google Inc.—returned 6.5% and fixed-income investments returned 2.2%, according to an earnings statement. Investments in real estate returned 2.7%. 

ADIA’s portfolio, in contrast, is much more of a mystery. One rare glimpse of the fund’s investing activities came through the diplomatic cables released in Wikileaks. A 2009 message details Head of Strategy Jean Paul-Villain and another ADIA official’s reluctance to shift out of equities into more secure investments as the financial crisis took hold. ADIA stayed the course, and has reaped profits as the stock market rallied. Furthermore, ADIA avoided the toxic assets that infected the financial system in the run up to the financial crisis by ignoring subprime investments and most corporate debt. 

These prudent decisions were not sufficient to keep ADIA in the top spot, however.

Beyond being the largest SWF, Norway’s fund also holds more listed equities than any other single entity on earth. At last count, it held 8,200 companies, which made up 60% of the entire investment portfolio. 

All of this being said, ADIA did beat out the Norwegian fund in a much more important ranking:aiCIO’s Power 100. Jean-Paul Villain took second, while Yngve Slyngstad came in at number five.

The 25 Largest Sovereign Wealth Funds Worldwide by Assets Under Management (US$)

See the Sovereign Wealth Fund Institute’s entire ranking here.