Norway’s sovereign wealth fund moved a step closer to adding private equity as a new asset class to its NOK15.8trn (€1.39trn) portfolio with a new piece of evidence gathered by the government painting a largely positive picture of making such a change.

The Finance Ministry said on Friday it had received a report from Trond Døskeland, professor at the NHH Norwegian School of Economics in Bergen, and Per Strömberg, professor of finance and private equity at the Stockholm School of Economics on the topic.

The new report was an update on the analysis the pair did for the ministry back in 2018 – a new version commissioned by the government on 10 November, as part of its new assessment of unlisted equity.

Døskeland and Strömberg said in the update’s conclusion: “We still believe the executive summary is relevant and find our recommendations applicable for the implementation of unlisted equity.”

In that 2018 summary, the professors had listed several statements about how the distinguishing features of the Government Pension Fund Global (GPFG) would put it at an advantage as a private equity investor, as well as considerations about how the SWF should go about starting an allocation to the asset type – though there was no explicit advice on whether or not the government should add unlisted shares to the fund.

The academics said they had also compared their 14-point list of implications and recommendations for GPFG with the recommendation letters from Norges Bank to the Ministry of Finance.

“Without evaluating each point in this document, we conclude that the fund’s implementation choices closely align with our advice,” they said.

The ministry said it had received Norges Bank’s advice and assessments of unlisted shares in the GPFG on 28 November and said its assessments would be presented in the SWF report in spring 2024.

When it published its advice to the ministry at the end of November, Norges Bank Investment Management (NBIM) – the central bank arm which manages the GPFG – said it envisaged a $40bn to $70bn (€37bn-€64bn) allocation to the asset class in 10 years’ time.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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