World’s largest sovereign wealth fund to hike NYC holdings

Norway to invest $9B in private properties in New York, Washington, Boston and Paris
June 24, 2014 12:05PM

Norway’s sovereign wealth fund, already a major investor in New York City real estate, is looking to grow its sizable property portfolio over the next three years.

The world’s largest sovereign wealth fund plans to invest 1 percent of its overall portfolio, or about $9 billion, in the private real estate market in each of the next three years, the New York Times reported. Real estate now accounts for roughly 1.2 percent of the fund’s overall portfolio.  But under Norway’s current government guidelines, that portion can be expanded to as much as 5 percent. The planned investment expansion will be concentrated in New York, Washington and Boston in the U.S., as well as Paris, the fund told the Times.

The fund was set up in 1990 to invest some of the Norwegian government’s oil revenue in markets outside the country. The idea? To hedge the oil-producing country’s exposure to volatility in the petroleum market. The sovereign wealth fund invests only in stocks, bonds and real estate, and generated an 11.8 percent return on its real estate investments in 2013. [NYT]Julie Strickland