Norway’s government has vetoed allowing the country’s Government Pension Fund Global (GPFG) to invest in unlisted equities, instead saying it wants to “gather more information” on the asset class.

The decision by the government follows a statement released by the fund’s asset manager Norges Bank in November, in which its executive board chair, Ida Wolden Bache, said the expansion to include unlisted equities would be a “natural evolution”.

Currently, the GPFG can invest in unlisted real estate and unlisted infrastructure for renewable energy, but unlisted equities are not permitted.

However, in its white paper on the fund, Norway’s Ministry of Finance said unlisted equities would entail investments that have to be managed in a manner that is substantially different from the current investment management.

Therefore, the Ministry of Finance wants to gather more information about both financial and non-financial aspects of unlisted equities. The Ministry intends for a new, external expert council for the fund, as suggested by the Sverdrup-committee, to be established in 2024. It will be tasked with assessing the different aspects of unlisted equities.

“The government does not wish to open for unlisted equities now. This is an important decision, and we must allow time to consider it carefully. We wish to establish an independent expert council for the GPFG, and with input from this council we will get a better decision basis and broader debate about all aspects of investments in unlisted equities,” Norway’s Minister of Finance, Trygve Slagsvold Vedum, said.

In addition, the white paper covered the Government Pension Fund Norway’s (GPFN) ownership stakes on the Oslo Stock Exchange. GPFN fund manager Folketrygdfondet has highlighted the potential risk of breaching the management mandate’s limit of 15 per cent ownership stakes in Norwegian companies.

As a solution, the government is proposing to establish a rule for annual withdrawals from the GPFN, as of the 2025 budget, with annual withdrawals no larger than what is required to handle the ownership stake challenge.

“There is broad consensus in the Storting that the GPFN is a financial investor. The 15 per cent ownership stake limit is important for the perception of the fund as such. The government now solves the ownership stake challenge for the GPFN,” Minister Vedum said.

The Minister also praised the strong results of the GPFG and GPFN in 2023, which saw the market value of the GPFN rise above NOK 350bn and the GPFG reached nearly NOK 15,800bn.

“The long-term investment strategy for the Government Pension Fund provides a solid basis for the Fund to benefit both current and future generations,” Minister Vedum said.

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