, Columnist
Norway's Wealth Fund Is Late to a Party It Should Skip
Jumping on the private equity bandwagon is unlikely to enhance returns.
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Norway's sovereign wealth fund wants approval to invest some of its $1 trillion of assets in unlisted companies. If the finance ministry assents, the fund will enter an asset class that's already overcrowded, expensive and complicated to manage, and which seems unlikely to boost returns.
The private equity market has grown by about 10 percent annually since 2005 to reach $2.5 trillion in assets under management, according to a November study that the Norwegian finance ministry commissioned from McKinsey & Co. Most other sovereign wealth funds, as well as large pension funds, already invest in the sector, the study said.