The Government Pension Fund white paper 2024

Today, the Ministry of Finance submits the annual white paper about the Government Pension Fund to the Storting. The white paper gives an account of the Government Pension Fund Norway (GPFN) and Government Pension Fund Global (GPFG) results and responsible investing. Other topics in this year’s paper include unlisted equities investments for the GPFG and a proposed solution to the ownership stakes challenge for the GPFN.

Increased market value and strong performance in 2023

Strong returns contributed to the marked value of the GPFN increasing above NOK 350 billion last year. The GPFG reached nearly NOK 15 800 billion at year end, as a result of strong returns and large transfers from the government. Depreciation of the Norwegian krone through 2023 contributed to increased value of the Fund measured in NOK. Going forwards, we must be prepared for that the Fund value may not necessarily increase at same rate as has been registered so far, and also for periods of potential decline in the value of the Fund.

– The long-term investment strategy for the Government Pension Fund provides a solid basis for the Fund to benefit both current and future generations, says Minister of Finance Mr. Trygve Slagsvold Vedum (Centre Party).

Unlisted equities in the GPFG

Norges Bank has advised the Ministry that the GPFG investment universe should be expanded to include unlisted equities. Today, the GPFG may be invested in unlisted real estate and unlisted infrastructure for renewable energy, but there is no general permission to invest in unlisted equities.

An expansion to unlisted equities would entail investments that have to be managed in a manner that is substantially different from the current investment management. The Ministry of Finance therefore wishes to gather more information about both financial and non-financial aspects of such investments. The Ministry intends for a new, external expert council for the Fund, as suggested by the Sverdrup-committee, to be established in 2024. Among the new council’s assignments shall be to assess different aspects of unlisted equities.

– The Government does not wish to open for unlisted equities now. This is an important decision, and we must allow time to consider it carefully. We wish to establish an independent expert council for the GPFG, and with input from this council we will get a better decision basis and broader debate about all aspects of investments in unlisted equities, says the Minister of Finance.

Solution for the ownership stake challenge for the GPFN

Over time, the GPFN’s ownership stakes on Oslo Stock Exchange have reached a level where GPFN fund manager Folketrygdfondet has called attention to potential risk of breaching the management mandate’s limit of 15 pct. ownership stakes in Norwegian companies. The issue has been discussed in several white papers to the Storting. As a solution, the Government is proposing to establish a rule for annual withdrawals from the GPFN, as of the 2025 budget. The annual withdrawals shall not be larger than what is required to handle the ownership stake challenge.

– There is broad consensus in the Storting that the GPFN is a financial investor. The 15 pct. ownership stake limit is important for the perception of the Fund as such. The government now solves the ownership stake challenge for the GPFN, says Mr. Vedum.

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