About the fund

The Government Pension Fund Global was set up in 1990 to underpin long-term considerations when phasing petroleum revenues into the Norwegian economy.

Norges Bank Investment Management manages the fund on behalf of the Ministry of Finance, which owns the fund on behalf of the Norwegian people. The ministry determines the fund’s investment strategy, following advice from among others Norges Bank Investment Management and discussions in Parliament. The management mandate defines the investment universe and the fund's strategic reference index.

The Ministry of Finance has on a regular basis transferred capital to the fund from the Norwegian state's petroleum revenues. The fund's capital is invested abroad, to avoid overheating the Norwegian economy and to shield it from the effects of oil price fluctuations. The fund invests in international equity and fixed-income markets and real estate. The fund is invested in most markets, countries and currencies to achieve broad exposure to global economic growth. 

The investments are to produce a high long-term return. We aim to achieve this with an acceptable level of risk, as a responsible investor and through an efficient organisation.  

The fund's purpose and history

The fund was set up to give the government room for manoeuvre in fiscal policy should oil prices drop or the mainland economy contract. It also served as a tool to manage the financial challenges of an ageing population and an expected drop in petroleum revenue. The fund was designed to be invested for the long term, but in a way that made it possible to draw on when required. Despite its name, the fund has no formal pension liabilities. No political decision has been made as to when the fund may be used to cover future pension costs, and the probability of large withdrawals from the fund is limited. This makes the fund truly long-term.

A film about the fund

Jens Stoltenberg describes the fund's main purposes

He talks about the broad political consensus on the management of the fund and the fund's central role in the Norwegian economy. Stoltenberg was Norway's Finance Minister from 1996-1997 and Prime Minister from 2000-2001 and 2005-2013.

Fiscal policy tool

The fund is an integrated part of the government’s annual budget. Its capital inflow consists of all government petroleum revenue, net financial transactions related to petroleum activities, net of what is spent to balance the state’s non-oil budget deficit.

This means the fund is fully integrated with the state budget and that net allocations to the fund reflect the total budget surplus, including petroleum revenue. Fiscal policy is based on the guideline that over time the structural, non-oil budget deficit shall correspond to the expected real return on the fund, estimated at 3 percent.

Last saved: 27/02/2019

Related pages

Did you find this helpful?