1. On the website for Norway's Sovereign Wealth Fund, a hypnotic and constantly-changing ticker indicates how much kroner the fund is losing and, mostly, gaining. People in London and New York worried about property prices might find it calms their nerves.

    The $830 billion Government Pension Fund Global, the biggest sovereign wealth fund, reported results for 2015 on Wednesday: an overall return of 2.7 percent, achieved despite volatile currency and equity markets, negative interest rates and worries about global growth. Still, that's its weakest return in five years and worse than the average annual return of 3.7 percent (after inflation and management costs) since 1998 when the fund's current management structure was set up.

    Investors care about the huge fund mostly because of what it tells us about the state of global markets. It has stakes in more than 9,000 companies and trades in stocks in 67 countries. On average, it claims a 1.3 percent holding in all the world's listed companies.

    Since 2011, the Norwegian fund has also been a big real estate investor after the government gave it the green light to buy assets. At the end of 2015, 3.1 percent of the fund's assets were in property, with 61.2 percent in equities and 35.7 percent in debt.

    Property Portfolio
    Norway's sovereign wealth fund plans to continue adding to its investment in global real estate
     
    Source: the Fund

    Those investments are outperforming the fund as a whole -- in 2015, real estate returned 10 percent -- and its managers plan to invest more. CEO Yngve Slyngstad targets 5 percent of the fund in this area.

    Real Return
    Property returns have outpaced returns from the broader Norway fund in the past two years
     
    Source: Government Pension Fund Global

    While a large chunk of the fund is devoted to listed vehicles, much more is in unlisted real estate -- about three quarters of the total property investment. And most of that's invested in just a handful of cities: New York, London and, to a lesser extent, Paris and Boston. The fund has started looking at Asia too, setting up specialist teams in Tokyo and Singapore. But overall, it says it plans:

    "To build a global, but concentrated, real estate portfolio. The strategy is to invest in a limited number of major cities."

    That should provide a counterpoint to fears that some big cities are headed for a downturn. Those concerns are based partly on soaring prices in recent years, as well as worries that international buyers will cut investment because of troubled markets. There are specific worries that some sovereign funds are withdrawing, especially those from the Middle East whose governments are struggling with cheap oil.

    Norway's fund will suffer too from lower crude prices, with government officials suggesting net inflows may be a thing of the past. But property owners in New York and London should still take reassurance from knowing at least one powerful investor is betting on those cities too.

    This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Duncan Mavin in London at dmavin@bloomberg.net

    To contact the editor responsible for this story:
    James Boxell at jboxell@bloomberg.net