Having learned last week that the world's central banks are their sovereign wealth proxies have secretly pumped over $29 trillion into markets [7] in the last few years, it is not entirely surprising to hear from one of the largest - Norway $888 billion oil fund - that it is buying stocks with bond hands and feet. As The Financial Times reports, Yngve Slyngstad, chief executive of Norway's sovereign wealth fund, is hiring aggressively to manage its real estate portfolio and while the oil fund already owns 2.5% of every listed European company on average, it plans to go above 5%. Phew, bagholder found...
Yngve Slyngstad, chief executive of Norway's $888bn oil fund, emphasised that it was "continuation of the strategy" but with numerous small changes.
All are in the same direction: we are incorporating as distinguishing characteristics firstly that we are very long-term investors…and secondly the very large scale and size of the fund.
The fund expects the number of companies it owns more than 5 per cent in to rise from 45 to 100 by 2016 and Mr Slyngstad said "the majority of those will be in European companies".
The oil fund already owns 2.5 per cent of every listed European company on average but going above 5 per cent will see it step up its responsible investor role by talking to chairmen and boards more.
"Why 5 per cent? We have put up explicitly higher demands on us in an ownership role," Mr Slyngstad explained. But he argued this would not lead to the fund becoming an activist but rather merely a "responsible investor".
But it's real estate where they are growing...
Another change will be a "very rapid growth in the number of employees", as Mr Slyngstad terms it, going from 370 at the end of last year to 600 by 2016.
However, 200 of those will be in its property arm and given only 38 currently are Mr Slyngstad said the build-up in the rest of the fund is not too speedy.
All those people are needed in property as the fund is struggling to reach its target of having 5 per cent of its assets in real estate; it currently has 1.2 per cent.
"The growth we are foreseeing in the real estate portfolio is such that we will have to manage some of these properties ourselves."
So there it is - the marginal buyer of property and stocks around the world (most especially Europe) is none other than the high-price-of-oil beneficiary Norway sovereign wealth fund.
