Should Norway’s Sovereign Fund Bet Big on Energy?


Sovereign wealth funds are often hyped by financial media and academics as contrarian institutional investors. Some studies have proven so. The shake-up of the oil industry could present opportunities for large savvy investors, as companies divest from mid- and downstream assets. One such news headline is Saudi Aramco, exploring to divest some oil-related assets and possibly go through some form of privatization. According to data from the Sovereign Wealth Fund Transaction Database, direct investments in energy by sovereign wealth funds totaled US$ 15.22 billion in 2015 versus US$ 6.27 billion in 2014. Should Norway’s sovereign wealth fund take advantage of investing in companies in the energy sector? There seems to be political will for at least renewable energy investments. Norway’s wealth fund would not be alone. Other public institutional investors have announced intentions to explore oil & gas investment plays such as Canada’s PSP Investments.

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