Norway Wealth Fund CEO Bids to Fill Infrastructure Investing Gap

  • Says risks are of `equal dimensions' to return opportunities
  • Says risk in infrastructure is disruption of cash flow

Norway’s $840 billion wealth fund is bidding to enter the $20 trillion infrastructure market that it sees as under invested and brimming with the cash flow it craves.

The fund last week proposed to the government that it be allowed to invest as much as 5 percent in such real assets as it seeks to boost returns. The fund has so far only been allowed to invest in stocks, bonds and real estate. The government will make a decision in the spring.

Yngve Slyngstad

Photographer: Simon Dawson/Bloomberg

Yngve Slyngstad, the fund’s chief executive officer, citing economists, said in an interview on Thursday that there’s an under-investment in infrastructure in most countries, in part because of issues of “pairing” capital markets with an activity usually linked to monopolies and that risks are of “equal dimensions” to return opportunities.

“There’s of course the possibility to find infrastructure with the same stability” as real estate “or even higher stability in cash flow, sometimes with guaranteed cash flow,” he said after a speech in Oslo. “So the issue with infrastructure is more whether there’s a possibility of disruption of the cash flow.”

The fund has also said it will target renewable energy as part of its push into real assets. It estimates such investments are now $350 billion to $400 billion annually and will increase.

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