Norway’s “Pension Fund Global” is the biggest sovereign-wealth fund in the world, worth an estimated $882B (more than double the national GDP). Not bad for a country with a population of just over 5m people.
It owns 2% of all listed shares in Europe and over 1% globally. Plus, contrary to the way most funds are structured, it’s incredibly transparent by detailing every investment it makes online.
And it even has a conscience!
The fund refuses to invest in firms with products deemed “unethical,” such as tobacco and weapons. It also acts as an activist of sorts by “blacklisting” corrupt companies, including those that misuse water and energy or engage in child labor.
And on top of all that, it’s actively fighting climate change by investing 1% of its money in “firms deemed to be green” and divesting from heavy polluters and coal companies.
Hey, 1% might not be much but at least it’s something.
A habit of saving, not spending
According to the fund’s boss, Yngve Slyngstad (good luck with that one), the government isn’t allowed to spend more than the fund’s expected annual returns (set at 4% a year).
Which means the biggest sovereign-wealth fund on planet Earth is basically being saved for a rainy day… as opposed to being spent on (or by) Norwegians.
That hasn’t been a problem up until now, as the country’s culture of political trust makes it “uncontroversial to save as much as possible.”
But as Norway changes (its younger population have only known a world where they’re among the wealthiest nations), some worry the fund may change with it.
As someone close to the fund says, “It’s very hard to have a huge sum of money at the bedside and to tighten your belt at the same time.” True that.
this article appeared in: the hustle.co