Norway wealth fund could invest $70b in private equity

OSLO, Nov 28 (Reuters): Norway's $1.5 trillion sovereign wealth fund, the world's largest, should include private equity investments in its portfolio, allocating up to $70 billion, the country's central bank recommended on Tuesday.
The Norwegian finance ministry in March asked the executive board of Norges Bank, which manages the fund, to assess whether unlisted shares should be added as an asset class.
Some 3-5 per cent of the fund's assets could gradually be moved to private equity funds, equivalent to between $40 billion-$70 billion, the central bank said in a statement.
A final decision will be made next year by parliament. It has previously rejected requests by the fund to move assets into private equity, arguing it could be too costly and would hamper the ability to judge its performance on an ongoing basis.
The fund, which invests Norway's surplus oil and gas revenue abroad, is the world's biggest single stock market investor, owning some 1.5 per cent of all globally listed shares, and has stakes in more than 9,200 companies.
"Norges Bank considers it a natural evolution of the investment strategy for unlisted equity investments to be permitted on a general basis," the central bank wrote in a letter to the finance ministry.
"A broader investment universe will provide more investment opportunities and help the fund benefit from a larger share of global value creation than today," it added.