* Total European investment to be cut to 41 pct from 54 pct
* Asia-Pacific, emerging markets pick up share
OSLO, March 30 Norway's $610 billion sovereign
wealth fund, Europe's biggest equity investor, plans to sharply
reduce its European exposure while raising investments in
emerging markets and Asia-Pacific, the finance ministry said on
Of its entire bond, fixed income and real estate portfolio,
European investments will be "gradually" reduced to 41 percent
from 54 percent, while Asia-Pacific's share will rise to 19
percent from 11 percent, Finance Minister Sigbjoern Johnsen told
a news conference.
"We're reducing our European exposure because we see that
economic development in the global economy is changing and this
should also be reflected in our investment strategy," Johnsen
said. "Most likely we'll have to sell some assets in Europe."
As a result, the share of emerging markets in the fund's
total portfolio will rise to 10 percent from 6 percent and the
share of the Americas and Africa will rise to 40 percent from 35
"It is just not possible to say how long this will take ...
it should be gradual and taking into account market
circumstances," ministry State Secretary Hilde Singsaas said.
Johnsen added that a previous rebalancing took two years.
The fund, which now holds over $120,000 per man, woman and
child in Norway, is forecast to grow to 5.86 trillion crowns or
$1.03 trillion by the start of 2020 as it collect the country's
lucrative oil and gas revenues.
It had a return on investment of 4.4 percent in the fourth
quarter of 2011 and -2.5 percent in all of 2011 as it remained
heavily exposed to Europe amid its market turbulence.
Shares from developed Europe, now making up 47 percent of
the Fund's equity portfolio, will be reduced to 38 percent. In
the fixed-income portfolio, developed Europe's weight will be
cut to 40 percent from 60 percent.
In fixed income, developed Asia-Pacific's share will be
lifted to 11 percent from 5 percent while its share of the
equity portfolio will rise to 15 percent from 11 percent, the
finance ministry said.
(Reporting by Balazs Koranyi and Joachim Dagenborg; Editing by