The world’s largest sovereign wealth fund is planning to take on more risk as it seeks to exploit its role as a strategic investor, in a move that could mark a new trend for conservative publicly-owned investment funds.
The Norwegian oil fund, which has more than $600 billion of assets under management, also believes it could be more opportunistic when markets dry up, as was the case during the financial crisis .
“The fund can exploit [its nature as a long-term investor] by being a provider of liquidity in periods when there is a lack of liquidity,” Pål Haugerud, head of asset management in Norway’s finance ministry, said in an interview.
The new approach will be closely watched outside Norway as the size of sovereign wealth funds in the Middle East and Asia , forcing managers to rethink their investments strategies.
Norway’s fund is a long distance bigger than its nearest rival, the Abu Dhabi Investment Authority, which has about $400 billion in assets, according to consultants Roubini Global Economics.
The fund, which received its first money in 1996 and now owns 1 per cent of all global equities, is also looking at favoring shares of smaller companies over larger ones, and undervalued stocks over high-growth ones.Page 1 of 3 | Next Page