Norway’s huge sovereign wealth fund known as the “oil fund” is flowing over and is likely to start making risker investments. Oil fund boss Yngve Slyngstad plans to hire as many as 200 new colleagues over the next two years and more of the fund will be managed externally.
Slyngstad calls the ongoing expansion of the fund’s operations “purely a consequence” of the fact that the fund “is big and will get even bigger.” The investment strategy released earlier this week for Norges Bank Investment Management (NBIM), the arm of Norway’s central bank that runs the fund fueled by the country’s oil revenues, notes that fund managers need to find new places to place the billions of cash flowing into the state treasury.
The fund is likely to boost investment in growing economies in Africa and the Middle East, and up to 5 percent of its assets in real estate. The fund intends to own at least 5 percent of the shares in more than 100 companies, double its investment in so-called “green” technology and expand its securities lending program. The fund’s current staff of 386 employees is expected to grow to around 600 by 2016, in order for the fund to exercise what Slyngstad calls “active ownership.”
Slyngstad and the fund sparked some controversy over a recent investment in the complicated Formula One system, specifically in one of its companies that was supposed to be publicly listed but wasn’t. Now there may be more risky investments but Slyngstad stressed adherence to NBIM standards and will be hiring people with “special competence,” mostly abroad. More than half of NBIM’s staff are expected to be working outside Norway within the next two years.