Yngve Slyngstad, who heads Norway’s huge sovereign wealth fund fueled by the country’s oil revenues, has been ranked as the world’s third most-powerful investor by an international trade organization that follows state investment funds. He didn’t deliver any stellar second-quarter results on Friday, but his global ranking is just the latest indication of how Norway’s wealth continues to command worldwide attention.
Slyngstad, age 50, oversees the investments made by what’s popularly known as Norway’s “oil fund.” His stewardship is on behalf of the country’s central bank and finance ministry, which also maintain a council that monitors the fund’s investments in ethical terms. Slyngstad, though, is the man many companies and investment bankers want to meet for the sheer power of his position.
Newspaper Dagens Næringsliv (DN) reported that only the head of Abu Dhabi’s state investment fund, Sheik Hamed al Nahyan, and the head of the Canadian Pension Plan Investment Board, Mark Wiseman, ranked higher than Slyngstad on the annual list compiled by SWF (Sovereign Wealth Fund) Institute. The same institute also has ranked Norway’s oil fund itself (formally known as the Government Pension Fund – Global) as the largest in the world (external link), with USD 737.2 billion in assets under management, bigger than Saudi Arabia’s SAMA Foreign Holdings (USD 675.9 billion) and the Abu Dhabi Investment Authority (USD 627 billion).
SWF noted that under Slyngstad’s leadership, Norway’s oil fund has, among other things, expanded and extended its investments to unlisted shares and started investing in real estate. It also has become Europe’s largest state investment fund and the world’s largest owner of publicly traded shares. On Friday, Slyngstad and his colleagues released results showing that the fund achieved a return of just 0.1 percent, or NOK 17 billion (external link), but they were satisfied because that was higher than the benchmark indices against which the fund is measured. Real estate investments produced an average return of 3.9 percent.
Norway’s emergence as a wealthy and thus powerful investor hasn’t gone unnoticed by another of the world’s most powerful financiers. Lloyd Blankfein, chairman and chief executive of investment banking firm Goldman Sachs, took time to visit Norway this week and return a call on Prime Minister Jens Stoltenberg, who had visited Blankfein in New York last year.
“It’s always interesting to hear Blankfein’s evaluations of the world economy, because he’s so near what’s happening,” Stoltenberg told DN. “Norway is a small, open economy that depends a lot on what happens internationally.”
Blankfein could report that he thinks the global economy is doing much better now than it was just a year ago. “We’re in a completely new situation now,” he said, adding that public confidence in the economy has increased considerably.
Blankfein also had some nice things to say about Norway’s oil fund, saying it was “exceptional” how Norwegian leaders have resisted the temptation to spend the country’s oil revenues, opting instead to save most of them in the oil fund for future generations. “That says something about political leadership and the character of the Norwegian people,” he said.
Norway’s oil fund is also an important shareholder in Goldman Sachs. “We can’t ignore the fact that we have a large shareholder that sits in Norway,” Blankfein told DN. “Your oil fund is an important investor in all companies because of its size.”
That has also propelled Norway into a record-strong economic position in the world, with the country of just 5 million people having the 22nd largest economy in the world, according to recent figures from the International Monetary Fund (IMF). A professor at the Norwegian business school NHH, Ola Grytten, told Aftenposten last spring that it was Norway’s best placement ever, fueled largely by its offshore oil and gas resources (and the management of them) along with Norwegian seafood and other industries.
Norway’s position in the world economic rankings may tumble, because of economic growth in other countries that have much larger populations. That doesn’t mean Norway will become poorer, and if the oil and gas resources hold out and prices remain high, it will still attract the likes of Blankfein and other financiers like him.