World’s Biggest Wealth Fund Gets New Stab at Infrastructure Bid

Norway is reconsidering whether to let its $870 billion sovereign wealth fund invest in unlisted infrastructure after parliament requested a more detailed study into the move.

The government, which three months ago rejected the fund’s bid to make such investments, will consider expanding its mandate in a white paper in the first half of next year, according to a letter to Norges Bank from the Finance Ministry obtained by Bloomberg. The shift follows a vote by a parliamentary committee in May to keep the option on the table, the document showed.

The fund has long lobbied to expand its mandate beyond stocks and bonds. It proposed in December that it be free to invest as much as 5 percent in infrastructure in an effort to boost returns. In 2010, it was allowed to invest 5 percent of its assets in real estate and has since built a $28 billion portfolio of properties in key locations such as Paris, London and New York.

Norway’s government in its April paper initially rejected the fund’s request to move into infrastructure, due in part to what it characterized as the “high regulatory or political risk” associated with such transactions.

The document obtained by Bloomberg showed that the government has now asked the central bank to describe how it would handle such risks and to provide a plan for reporting on investments. It also wants a study on how other funds have handled such exposures, according to the letter. Norges Bank has until December 20 to respond.

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