Overview Of The Travails At Norway's Sovereign Wealth Fund
Bloomberg has done a good (and lengthy) analysis of the worst year ever of the world's third largest sovereign wealth fund, the $300 billion Norway Government Pension Fund. Even though Norway is officially socialist so it is technically at least one step ahead of the U.S., its sovereign fund, which acts like one huge hedge fund, didn't fare any better than its redemption-suspending American brethren, and piled bad investment upon bad investment including such zingers as Lehman, Fannie & Freddie, and Citi, not to mention its 67% stake in conglomerate StatoilHydro in which it has lost roughly $35 billion from STL.NO's peak price of NOK216 in May to current NOK116 levels. The article also discloses the rather peculiar idiosyncrasies of fund CEO Yngve Slyngstad (listening to Taleb's Black Swan on his iPod among other things), serving as further proof that there is no such thing as a normal hedge fund manager. Slyngstad, who plans on investing in equities and real estate in 2009, may have another bad year by the looks of things.
Interestingly, and adding to further pain at private-jet maker Textron (which hit another 52 week low today), the fund recently excluded Textron from its holdings as the company makes (in addition to now infamous Cessna jets) cluster weapons. This means there will soon be another 1.1 million block of TXT stock hitting the market.
Full Bloomberg article here