Norway Government Pension Fund Global
|Kingdom of Norway||US$ 878 Billion|
Transparency Rating: 10
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Firm Investment Style: Index
Entity Structure: Fund
Population Est.: 5.06 million – 2013
Wealth Per Capita Est.: $173,518
The Government Pension Fund Global (GPFG) is a sovereign wealth fund where the surplus wealth produced by Norwegian petroleum income is held. The fund changed name in January 2006 from its previous name the Petroleum Fund of Norway. The fund is commonly referred to as the Petroleum Fund (Norwegian: Oljefondet). It is not actually a pension fund as it derives its financial backing from oil profits and not pensioners.
In 2013, the NBIM created a corporate Governance Advisory Board to strengthen its long-term active ownership. The advisory board will assist in board nomination practices with regard to the sovereign fund’s listed equity investments. In addition, the board will serve as a body on active ownership and regularly assess NBIM’s ownership activities relative to optimal practices. Listed companies that undergo strategy shifts, takeovers or capital restructurings may receive board advice. Target companies will be firms in which the NBIM owns more than $1 billion in shareholdings.
Background on Norway Government Pension Fund Global
In 1969, oil was discovered in the North Sea. In 1971, oil production began in Norway and oil and gas revenues were treated as fiscal ordinary revenue.
Later in 1990, the Storting passed the Government Petroleum Fund Act. The Petroleum Fund was established in 1990 after a decision by the legislature assembly Stortinget to counter the effects of the forthcoming decline in income and to smooth out the disrupting effects of highly fluctuating oil prices.
The fund invested parts of the large surplus generated by the Norwegian petroleum sector, generated mainly from taxes of companies, but also payment for license to explore as well as Norway’s Direct Financial Interest and dividends from the partial ownership of StatoilHydro.
The sovereign wealth fund is administered by Norges Bank Investment Management (NBIM), a division of Norges Bank. NBIM established a corporate Governance Advisory Board.
All the government’s oil and gas-related income which include taxes, ownership shares and the country’s dividends from Statoil are given to the GPFG.
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