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The world's second-largest sovereign wealth fund, Norway's Government Pension Fund-Global, is ramping up its investment in European equities and plans to set up its own private equity unit.
Reuters reports that:
Norway's $400 billion oil fund will within weeks own more than 1% of European stocks, sees market turmoil as a buying opportunity and has set up a division to do private equity-type deals. The fund has plowed ahead with its plans to allocate 60% of the capital into stocks, despite absorbing $15 billion in losses in the first quarter, on a 12.7% negative return. However the fund, which the government forecast would receive $1 billion a week to invest, has been receiving well in excess of that thanks to high oil prices allowing it to continue buying what it feels are bargain-priced stocks. Sovereign wealth funds have been playing a more prominent role in global stock markets over the last 12 months, particularly as they stepped in to help shore up the balance sheets of U.S. financial firms sent reeling by debt market woes. At The Deal's Private Capital Symposium, Gary Parr, vice chairman at Lazard, spoke about the rise of sovereign wealth funds, saying, "[Sovereign wealth funds] have historically taken stakes in large companies, but the stakes will be anywhere between 2% and 5%. That's what they like, they want to know a name, they want to put a meaningful amount of money to work, but they're still a passive investor." Click on the video below for the entire interview. - George White See Reuters story See Dealscape post on SWF from the Private Capital Symposium Categories Deal Video
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