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



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, December 13, 2018



Turkey Wealth Fund Could Tap Debt Markets in 2019

Turkiye Varlik Fonu or Turkey Wealth Fund could be issuing a large bond in 2019. The loan would most likely be short term in nature with a maturity of two years and be syndicated.

Rahm Emanuel Suggests Bonds to Help Support Chicago Pensions

The outgoing Chicago Mayor Rahm Emanuel revealed a plan on possibly issuing US$ 10 billion in bonds in funding Chicago’s underfunded pension funds. Chicago’s four pension funds have an average funding ratio of 26%. In March 2016, the Illinois Supreme Court ruled an earlier pension reform law effecting employees and laborers’ pension funds that was signed by then Illinois Governor Pat Quinn that the law was unconstitutional.

SoftBank and Alibaba Back PT Tokopedia

PT Tokopedia is an Indonesian generalist e-commerce site. Tokopedia raised US$ 1.1 billion in an investment round led by the SoftBank Vision Fund and Alibaba Group. Softbank Ventures Korea and other investors participated in the round as well. William Tanuwijaya is the CEO and Co-Founder of Tokopedia.

Tikehau Capital and Total SA Form Low Carbon Fund

Tikehau Capital and Total SA created a private equity fund to focus on supporting the energy transition to cleaner sources of energy. The fund held a €350 million first close and raised money from investors such as Bpifrance and Groupama as anchor investors.

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Italian ANAS and RDIF Invest and Build the Fourth Section of Moscow’s Central Ring Road



The Russian Direct Investment Fund (RDIF) inked a deal with ANAS S.p.A. (formerly known as Azienda Nazionale Autonoma delle Strade), the Italian state highway management company, to implement a concession agreement to build and operate the fourth section of the massive Moscow Central Ring Road. The transaction expects to be finalized in the first quarter of 2019. This is the final section of Central Ring Road, which is 96.5 kilometers long. According to the RDIF, “Under the terms of the concession agreement, the cost of construction is 85.4 billion rubles, of which the concessionaire will provide 49.7 billion rubles and private investors will provide 35.7 billion rubles.”

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Follow the Money – Episode 48



This long-form podcast was recorded on December 11, 2018. Michael Maduell dissects the latest geopolitical trends that can impact institutional investors such as pensions, sovereign wealth funds, and endowments. Maduell lends his opinion on the lawsuit of Neiman Marcus and bumps in the road for augmented reality.

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1:15 Huawei, Canada, Brexit, and Macron Headache
6:30 Sovereign Wealth Fund Asset Allocation
9:58 India Gets a New Central Bank Governor
13:26 Pensions Go Bust on U.S. Retailers
17:04 Augmented Reality and Sovereign Funds
22:00 Former CalPERS CIO Goes to Morgan Stanley Investment Management
24:30 Oman Investment Fund Goes on Defense in Public Markets
25:00 Japanese Scandals and Opportunities


Stream off Follow the Money

The views in this media are expressed by Michael Maduell and other participants and are not reflective of the Sovereign Wealth Fund Institute (SWFI).

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