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BIG YEAR: Norway’s SWF Generates 13.66% for 2017

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Norway Government Pension Fund Global returned 13.66%, or 1,028 billion NOK, in 2017. The wealth fund also hit another milestone, surpassing 8 trillion NOK on April 26, 2017. By September 19, 2017, the wealth fund exceeded US$ 1 trillion in assets. Norway’s GPFG returned 19.44% in equities, buoyed by the U.S. stock market. The wealth fund generated 3.31% in fixed income and 7.52% in unlisted real estate. The overall return on the sovereign fund was 0.7 percentage point higher than the return on the benchmark index. The split of assets for Norway’s GPFG on December 31, 2017 was 66.6% was invested in equities, 2.6% in unlisted real estate and 30.8% in fixed income. At the end of the year, the sovereign investor had 876 billion NOK invested in equities and bonds in emerging markets, compared to 775 billion NOK in 2016.

Norway GPFG – 2017 Annual Equity Returns (International Currency)
U.S. – 14.5%
U.K. – 18.0%
Japan – 20.3%
Germany – 25.5%
France – 24.7%
Switzerland – 18.3%
China – 43.4%
Canada – 10.8%
Australia – 15.2%
South Korea – 36.0%

“The fund’s cumulative return since inception has passed 4,000 billion kroner. One out of four kroner return was generated in 2017, after a very strong year for the fund. Again, our equity investments returned strongest with a return close to 20 percent,” says Yngve Slyngstad, CEO of Norges Bank Investment Management, in a press release.

Norway’s GPFG starts out using the FTSE Global All Cap stock index for its equity investments. The wealth fund then starts adding countries into its internal reference portfolio, in which it picks securities, instruments and markets from a broader universe than used for the strategic benchmark index.

More Interesting Points
In 2017, Norway’s GPFG added Malta to its equity universe.

China vs. India
The sovereign fund had 217 billion NOK invested in China at the end of 2017. These investments were spread across 566 companies and 45 bonds.
The sovereign fund had 96 billion NOK invested in India at the end of 2017. These investments were spread across 275 companies and 36 bonds.

Norway’s GPFG had 6.801 billion NOK invested in Saudi Arabia at the end of 2017.

SWFI First Read, June 21, 2018

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PSP Investments Nears Deal on Azelis

PSP Investments and EQT Partners (through fund EQT VIII) are in exclusive talks to acquire Belgium-based Azelis S.A. from funds managed by Apax Partners. Formed in 2001, Azelis is a specialty chemicals and food ingredients distributor. The transaction is subject to regulatory approvals.

Oxford Properties Wins Rights on Barangaroo Office Development

Melbourne-based Grocon Pty Ltd selected Oxford Properties, the real estate unit of OMERS, as a preferred partner for it’s a A$ 2 billion, 5.2-hectare Barangaroo Central project development. This is an office tower development. Oxford Properties essentially won the rights toward the project (rumored at a price of A$ 100 million), freeing the developer from a high-cost finance deal with Maxcap, a lender.

Investment Management Corporation of Ontario Selects Jean Michel as CIO

The Investment Management Corporation of Ontario named Jean Michel as chief investment officer. This role is effective July 3, 2018. Michel was executive vice president, advisory services to depositors and strategic analysis, at Caisse de Depot et Placement du Quebec (CDPQ).

Wil Warren Named President of Lexington Partners

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Large Public Asset Owners Commit to Goodman Brazil Logistics Partnership

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Canada Pension Plan Investment Board (CPPIB) unveiled plans to commit 500 million BRL (C$ 175 million) in equity for a 20% interest in the newly established Goodman Brazil Logistics Partnership to invest in prime logistics and industrial assets in the key gateway cities of São Paulo and Rio de Janeiro. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mubadala Supports Two European Aquaculture Transactions

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Mubadala Investment Company is keen on growing exposure to agribusinesses whether in farming or aquaculture. With money from Mubadala and AMERRA Capital Management LLC, Andromeda Group acquired Nireus SA (at 74.34% stake) and Selonda SA at (79.62% stake), two European aquaculture companies that focus on sea bream and sea bass. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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