The world's largest sovereign wealth fund – the $660 billion investment pool owned by the government of Norway – is planning to invest approximately $11 billion in U.S. commercial real estate.
Bloomberg News reports that the fund is mandated by the Norwegian finance ministry to invest 5% of its assets in property; as of the end of the third quarter, it only had 0.3% in real estate, with 60.3% invested in stocks and 39.4% in bonds. Yngve Slyngstad, CEO of Oslo-based Norges Bank Investment Management and the overseer of the fund, believes the best property investments lie across the Atlantic.
‘The U.S. is the next real estate market to invest in,’ Slyngstad says, adding that the fund will focus primarily on large office complexes in major cities and developed retail malls.
The fund has also targeted key markets in Europe, most recently with a $1.08 billion purchase of an office complex in Zurich. The fund generates its money from taxes on Norway's oil and gas industries, as well as from ownership of the nation's petroleum fields and investment in the Statoil ASA (STL) energy company.
