Purpose And Governance

The Government Pension Fund of Norway: A Long-Term Approach to Wealth Management

Purpose and Governance

The Government Pension Fund of Norway (GPFN) is a sovereign wealth fund established in 1990 to manage revenue from the country's oil and gas resources for future generations.

The fund is managed by the Norges Bank Investment Management (NBIM) under the supervision of the Norwegian Ministry of Finance.

Investment Strategy

The GPFN's investment strategy is based on a long-term horizon and aims to maximize returns while minimizing risk.

• The fund invests primarily in listed stocks, bonds, and real estate.
• Its portfolio is diversified across global markets.
• The fund invests in accordance with ethical guidelines and responsible investment principles.

Management Provisions

The GPFN is subject to strict management provisions to ensure its long-term sustainability.

• The fund's withdrawal rate is limited to 3% of its value per year.
• The fund's investments must be balanced to mitigate risk.
• The fund's management is subject to regular audits and oversight.

Performance

The GPFN has consistently delivered strong returns over the long term.

• The annual geometric average return of the GPFG was 6.1% over the 10 years ending in 2020.
• The fund had a market value of 10,914 billion kroner at the end of 2020.

Conclusion

The Government Pension Fund of Norway is a prime example of a well-managed sovereign wealth fund that provides a long-term source of financial security for future generations.