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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.

LIA Files Lawsuit Against JPMorgan Chase

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The Libyan Investment Authority (LIA) has reportedly filed a lawsuit against JPMorgan in London, according to a spokeswoman for the country’s sovereign wealth fund. Like Libya itself, there are a number of competing factions within the LIA claiming to be the rightful custodians of the some US$ 60 billion that once resided within the fund’s accounts worldwide. With their ownership unclear, many of these accounts remain frozen under sanctions imposed by the United Nations since 2011, resulting in a number of legal battles taken up by Libyan authorities seeking to recoup and take control of the fund’s scattered assets.

The sovereign wealth fund still has its overseas assets frozen relevant to United Nations Security Council resolutions. However, the Libyan Foreign Investment Company, operating under the acronym
LAFICO, is a large sovereign wealth enterprise under LIA. It continues to run out of Tripoli Tower.

London Case

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Massive Demand is Expected as Saudi Arabia Opens Public Cinemas

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Saudi Arabia will be opening the country’s first public movie theatre in more than a generation on April 18, 2018 in collaboration with AMC Entertainment, according to an announcement from the Saudi Ministry of Culture and Information. Located in Riyadh’s King Abdullah Financial District (KAFD), the cinema complex’s debut marks the signing of a definitive agreement between the U.S.-based cinema operator and the Public Investment Fund’s (PIF) newly-incorporated Development and Investment Entertainment Company (DIEC). Marvel’s “Black Panther” will be the first movie shown publicly.

Saudi Arabia lifted a 35-year ban on public cinemas last December as part of the kingdom’s grand Vision 2030 initiative to diversify its economy away from hydrocarbon revenues and expand growth of a nascent entertainment industry, opening the doors for investment partnerships with foreign entertainment companies. In tandem with the lifting of the ban, the PIF signed a non-binding Memorandum of Understanding (MoU) with AMC – the largest cinema operator by screens in the U.S., Europe and the world – to explore a wide range of commercial opportunities.

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Why Did BlackRock Acquire Tennenbaum Capital Partners?

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Asset manager giant BlackRock Inc. signed a definitive agreement to acquire Tennenbaum Capital Partners, LLC, in a bid to strengthen its credit platform. BlackRock wants to build a larger private credit business to expand fee generation and offer clients more than just passive products. Formed in 1999, Los Angeles-based Tennenbaum Capital Partners is a firm that focuses on middle market performing credit and special situation credit opportunities. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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