US$1 Trillion Investment Fund Set Up by Norway Relapses
Norway had enjoyed a profitable decade with purchases from London to New York, but its US$1 trillion investment fund is being scaled back. It is to be diverted toward other real estate investments such as listed properties, to cut costs and to adjust to the prevailing trend in property markets today.
It had been struggling to find properties to invest in during what had been a tumultuous year for real estate. Targets set by the fund have also been lowered, suggesting that it is nearing or had come to its end.
The property fund has no plans to sell off properties which had come to it during its haul, but the loss of such a big market investor is sure to be felt, according to the report. The biggest real estate markets in the world--NYC's Times Square, Paris' Champs Elysees, and London's Regent Street--are home to some properties which the market fund had bought.
Another reason it might have decided to scale back is to curb corruption. According to Free Malaysia Today, the investment fund may be taking precautions for controlling corruption risks. Money laundering is one of the factors it is worried about, a problem that's possible with the size of the investment fund.
The fund moved out of 30 companies, aside from scaling back on buying investments in posh neighborhoods. These divestments were undisclosed as well as created as a precaution towards events that may result in corruption and further illegal distribution of the wealth fund.
Money laundering is one of the many allegations that is rocking the Nordic region of Europe. The Danske Bank has been connected to one such allegation, where US$230 billion may have passed through it. The amount of money may have been dirty and it had been funneled through the bank's Estonian branch.
The investment funds moves have signaled a new direction. The fund was accumulated from years of dealing in oil, and was supposed to create a 'safeguard' for future generations of Norwegians. It was put into real estate during 2011, but it remained on the safe side, targeting properties that were low in prices. The fund has since adjusted as the global property market fell into troubles, like those of the US and Asia.
Norway has decided on creating safer transactions. According to officials, this is to ride the sign of the times in the real property market.