Government Pension Fund Global (GPFG)

Large state revenues from the petroleum activities have resulted in substantial financial assets in the GPFG. The Fund was established in 1990 as a fiscal policy tool to underpin long-term considerations in the phasing in of petroleum revenues into the Norwegian economy. Long-term, sound management of the Fund helps to ensure that both present and future generations can benefit from Norway’s petroleum wealth.

The GPFG is an instrument for general saving and does not have clearly defined future liabilities. Fund capital is not earmarked for pensions or other specific purposes. The investment objective is to maximise the purchasing power of the fund capital, given a moderate level of risk. The adoption of responsible investment practices supports this objective.

The Management of the Government Pension Fund in 2013 More on the GPFG in the annual report to the Storting
 

News:

A sound and responsible management of the Government Pension Fund

"The Government is today presenting a report to Parliament (Storting) on the management of the Government Pension Fund in 2013. - The Fund has served us well and it gives important contributions to the financing of our welfare state", says Minister of Finance Siv Jensen.

New decisions about the Government Pension Fund Global

The Ministry of Finance has decided to exclude the companies Sesa Sterlite, Africa Israel Investments and Danya Cebus from the Government Pension Fund Global (GPFG).

Market value and capital inflow (GPFG)

The market value of the GPFG rose 440 billion to 5,478 billion Norwegian kroner in the first half of 2014. The inflow of new capital to the Fund during the first six months of the year was 88 billion kroner, whilst the return over the period accounted for 270 billion kroner. Changes in the Norwegian krone exchange rate entailed, when taken in isolation, an increase in value of 85 billion kroner. Asset management costs over the period were somewhat in excess of 1 billion kroner.

Fund performance (GPFG)

The return on the GPFG in the first half of 2014 was 5.0 percent, measured in the currency basket of the Fund. When measured in Norwegian kroner, the return on the Fund was 7.0 percent. The difference between the return in Norwegian kroner and in the currency basket of the Fund was caused by depreciation of the Norwegian krone relative to the currency basket of the Fund over this period. However, the return in international currency is the relevant measure with regard to developments in the international purchasing power of the Fund. The return on the equity portfolio was 5.5 percent, the return on the fixed-income portfolio was 4.1 percent, and the return on the real estate portfolio was 5.1 percent, as measured in the currency basket of the Fund.

Report from the Strategy Council on Responsible Investment

The Strategy Council today presented a report on the GPFG's strategy for responsible investments. – The Council offers several recommendations on how we can strengthen the Fund's efforts further, says Minister of Finance Siv Jensen.

Mandate for the review of active management of GPFG

The Ministry plans to undertake a review of Norges Bank’s management of GPFG, to be presented to the Parliament in the spring of 2014. An important part of the review will be a report made by a small group of acknowledged experts with competencies both from academia and asset management practice.

Strategic benchmark index of the GPFG

The GPFG's investments are spread across several asset classes. The long-term investment strategy entails that 60 percent of the fund capital is invested in equities. The remaining capital is invested in fixed income and real estate. Real estate investments may account for up to 5 percent of the fund. At the end of June 2014 61.3 percent of the Fund was invested in equities, 37.6 percent in fixed-income securities and 1.2 percent in real estate.

Investment Strategy of the GPFG

The investment strategy of the GPFG has been developed over time, based on comprehensive professional assessments. The objective of the Fund's investments is to achieve the highest possible return over time, given a moderate level of risk. The Fund has, generally speaking, a high risk bearing capacity. The appropriate risk level for the Fund will, nevertheless, depend on the risk tolerance of the owners, represented by the political authorities

Governance framework for the GPFG

The Storting has, in the Government Pension Fund Act, made the Ministry of Finance responsible for the management of the Fund. Operational management of the Government Pension Fund Global (GPFG) is carried out by Norges Bank.

Reports and letters submitted to the Ministry

More documents about this subject

Contact information

Asset Management Department

Telephone: +47 22 24 41 63
Fax: +47 22 24 95 91

Address

The Ministry of Finance
Asset Management Department
P.O. Box 8008 Dep
0030 Oslo
Norway

Old Government Building: Stairway

More about the Government Pension Fund Global (GPFG)

Contact information

Asset Management Department

Telephone: +47 22 24 41 63
Fax: +47 22 24 95 91

Address

The Ministry of Finance
Asset Management Department
P.O. Box 8008 Dep
0030 Oslo
Norway