Norway's colossal sovereign wealth fund is poised to invest billions of euros of the country's oil revenues into direct real estate and infrastructure, heralding the arrival of a new heavy-weight at a time when the European real estate bubble is clearly deflating.
Norway's colossal sovereign wealth fund is poised to invest billions of euros of the country's oil revenues into direct real estate and infrastructure, heralding the arrival of a new heavy-weight at a time when the European real estate bubble is clearly deflating.
A white paper with proposals to expand the remit of the EUR 220 bn Government Pension Fund - Global to direct real estate and infrastructure investments is to be published in early April. If the recommendations are accepted by the government, the fund will likely establish a new investment class for non-listed real estate that would account for up to 10% of the fund.
The government in Oslo began laying the groundwork for the fund last year. In March 2007, finance minister Kristin Halvorsen issued a tender seeking advice from companies on the tax issues involved in investing in real estate and infrastructure in 32 foreign markets - including Western Europe.
The Government Pension Fund - Global is the largest pension fund in Europe and the second largest in the world. Dutch pension giants ABP and PGGM have respectively EUR 26.4 bn and EUR 10.8 bn invested in real estate, according to figures compiled by PropertyNL.
