Norway to build PE, infrastructure focus

The Government Pension Fund Global, with more than $400bn in assets, will look for environmentally related private equity and infrastructure opportunities, and also is planning an emerging-markets programme.

Norway’s massive sovereign wealth fund, the Government Pension Fund Global, is set to broaden its environmentally focused investment programme to include private equity and infrastructure.

The NOK2.8 trillion fund also is a step closer to building an investment programme around emerging markets that would include private equity and infrastructure.

The Government Pension Fund Global will build a “broad” investment programme around “unlisted environmental investments or unlisted investments aimed at sustainable growth in emerging markets”, according to the fund’s 2011 budget report.

“The [central] bank recommends that unlisted investments aimed at the environment and sustainable growth should take place within the framework of a management mandate that permits unlisted investments on a broader basis,” according to a letter from Norway's central bank, Norges Bank, which manages the fund on behalf of the Ministry of Finance.

The fund, which manages assets from Norway’s oil and gas industry, has been contemplating building a program around environmentally related private markets investments, and emerging markets, since last year.

In a report from earlier this year, Norway’s Ministry of Finance estimated the environmental investment programme would have NOK20 billion (€2.5 billion; $3.4 billion) available to spend over five years. A portion of that total would be allocated to private equity and infrastructure, if ultimately approved by the finance ministry. This year, the fund has invested about NOK7 billion on the environmental investment programme, targeting “already permitted” investment vehicles like listed equities and bonds.

“In view of the letter from Norges Bank, the Ministry will continue efforts to assess new unlisted investments under the environmental programme and whether an investment programme aimed at emerging markets should be established,” the ministry said in its report, which was published Tuesday.