23 years ago, the Government Pension Fund Global received the first inflow from the Ministry of Finance of nearly 2 billion kroner. Since then, the fund has grown to 10,000 billion kroner.
About half of the market value is return on the fund’s investments. The fund has received inflow of just above 3,300 billion kroner. The rest of the market value is fluctuations in the Norwegian krone.
“When the fund was set up, nobody thought it would pass 10,000 billion kroner. We were lucky to discover oil. The return on the investments in global financial markets has been so high that it can be compared to having discovered oil again”, says Yngve Slyngstad, Chief Executive Officer in Norges Bank Investment Management.
Norges Bank Investment Management was established as a separate organisation on 1 January, 1998 to manage the fund with a market value of 113 billion kroner. In the first six months, 40 percent was invested in equities. Since then, the fund's total return has grown larger than the total inflow to the fund.
“We are a global organisation with skilled employees of 37 nationalities across our offices in Oslo, London, New York, Singapore, and Shanghai. Our most important task is to generate return with acceptable risk”, Slyngstad says.
On 23 December this year 50 years have passed since the historic day when Norway announced that we had discovered oil. Today, the fund is twice as large as the government’s estimated future petroleum revenues. The fund is larger than the government’s petroleum income measured in 2020 kroner and finances more than 17 percent of the national budget.
“Measured in 2020 kroner, the fund is greater than what the government has earned from petroleum activities the last 50 years. How we as a nation manage the financial wealth for future generations will have massive impact on welfare in Norway, he says.