The Government Pension Fund:

Expert group to advice on real estate and infrastructure investments

The Ministry of Finance has appointed an expert group to review real estate and infrastructure investments in the Government Pension Fund Global (GPFG). – We are continuously looking at how changes to the investment strategy may improve the return on the Fund, given a moderate level of risk, says the Minister of Finance, Siv Jensen.

In December 2014, the Ministry announced that it would assess whether the 5-percent cap on real estate investment should be increased, as well as whether to permit the Fund to be invested in unlisted infrastructure.

The Ministry has appointed an expert group to advice on how real estate and infrastructure investments can improve the ratio between return and risk, as well as how the Ministry may best formulate its mandate to Norges Bank for such investments. The expert group is chaired by Professor Stijn Van Nieuwerburgh of New York University. He is joined by Richard Stanton, Professor at the University of California, and Leo de Bever, former CEO of Alberta Investment Management Corporation.

- The investment strategy of the Fund has evolved gradually over time, based on comprehensive professional assessments. Such will also be the case for the current review of real estate and infrastructure investments, says the Minister of Finance, Siv Jensen.

The Ministry has also requested advice from Norges Bank. The Ministry intends to address the recommendations from Norges Bank and the expert group in the report to Parliament on the management of the Government Pension Fund to be published in the spring of 2016.

If it is decided to permit unlisted infrastructure investments in general, the investment universe of the GPFG will also be expanded to include unlisted infrastructure investments in renewable energy and emerging markets. The analyses and advice from the expert group and Norges Bank shall address investments in these markets. The underlying premise shall be that such investments are subject to the same requirements as apply to the other investments in the GPFG.

 

Read more: