Norway’s Sovereign Fund Contemplates Infrastructure Allocation, Boosting Real Estate

Leo de Bever

Leo de Bever, Former CEO of AIMCo

The Norwegian Ministry of Finance is moving forward on assessing whether the sovereign wealth fund should boost allocation over its 5% cap in real estate and begin to invest in unlisted infrastructure. Norway’s Government Pension Fund Global (GPFG) made headways investing in properties in cities such as London, New York and Boston. The sovereign fund, built from Norway’s oil and gas revenues, has invested in buildings such as Google’s DC headquarters and the historic Pollen Estate in London. In addition, the oil fund will typically partner with an outside investor like The Crown Estate, MetLife, TIAA-CREF or Prologis.

Norwegian Minister of Finance Siv Jensen said in a press release, “We are continuously looking at how changes to the investment strategy may improve the return on the Fund, given a moderate level of risk.”

One individual in the expert group is Leo de Bever, former CEO of Alberta Investment Management Corporation (AIMCo).

Asset Allocation

The massive sovereign wealth fund is currently, 60% allocated to stocks, 35% to fixed income and 5% to real estate – a vast difference compared to a decade ago. Norway’s GPFG has hesitated moving into unlisted infrastructure and private equity with two major impediments including fees and opportunities.

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