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Norway’s Sovereign Wealth Fund Gets Closer to Private Equity

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In a June 29, 2017 letter, Norway’s Finance Ministry asked the central bank to consider whether Norway’s Government Pension Fund Global (GPFG) should be permitted to invest in private equity or unlisted equity. On January 8, 2018, Norges Bank penned an official letter back and gave its recommendations.

Norges Bank had recently advised on private equity in two letters, one dated back on July 6, 2010. The concern then was that private equity required increased head count and operational management. Norges Bank did recommend permitting such investment at the time. Fast forward, Norway’s sovereign fund launched its large real estate program, trailing its expertise in private markets.

“Norway’s sovereign fund is in the trillion dollar investor class. The wealth fund has intimate knowledge with the largest listed companies, as the fund votes on important corporate issues. In addition, the wealth fund has a long-time horizon,” said Michael Maduell, President of the Sovereign Wealth Fund Institute (SWFI).

Clarification: Norway’s SWF does not take board seats. SWFI clarified Michael Maduell’s comments as they could have been construed that Norway’s SWF takes board seats.

Here is the letter (Norges Bank Investment Management website).

After prosecuting its case, Norges Bank believes that if the sovereign fund did invest in private equity, they would most likely want to invest in private equity fund and alongside private equity funds as co-investors.

The letter concludes that, “The Bank’s recommendation is that the Ministry permits investments in unlisted equity in its definition of the investment universe.”

Saudi Aramco and PIF See Opportunities in Russia

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Saudi Arabia’s Public Investment Fund (PIF) is currently exploring opportunities within Russia. PIF is working with the Russian Direct Investment Fund (RDIF) on a number of fronts. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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HNA Group Aims to Shrink and Sell

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Chinese conglomerate HNA Group is on a selling spree due to an order from the government in Beijing to scale back on debt. HNA Group joins Anbang Insurance Group and Dalian Wanda Group in deleveraging from global assets, particularly in hotels and real estate. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Central Bank of Hungary Buys Mounds of Gold

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In October, the Central Bank of Hungary (MNB) boosted its gold reserves by 10 times, from 3.1 tons to 31.5 tons. This was revealed on October 16, 2018. The gold acquired by the central bank in October has a holding value of US$ 1.24 billion.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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