November 2, 2010 / 7:01 PM / 9 years ago

Norway's oil fund to start buying real estate soon

OSLO, Nov 2 (Reuters) - Norway’s $500-billion-plus sovereign wealth fund will start investing in real estate in the “near future” and will probably broaden its portfolio further with infrastructure assets, the central bank chief said on Tuesday.

Norges Bank runs Norway’s wealth fund on behalf of the government, which siphons away the bulk of the North Sea state’s taxes from oil and gas activities into the offshore fund.

“Real estate purchases...will commence in the near future,” Governor Svein Gjedrem said in a speech published on Norges Bank’s website. Norway earlier allowed its wealth fund to keep up to 5 percent of its assets in real estate. [ID:nLDE6460OO]

“The dividing line between real estate and infrastructure is not very clear, and looking further ahead, it may be natural to invest in assets that can be classified as infrastructure.”

Gjedrem also said that the fund could hold private equity assets over time, although it would not be a big player in the sector due to high managerial fees.

He also said that Norway should consider scrapping a regional allocation weighting system for the fund which now favours investments in Europe. If scrapped, the fund would invest more in the Americas and in Asia, Gjedrem said.

Reporting by Wojciech Moskwa

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