January 10, 2018 / 11:57 AM / a year ago

UPDATE 1-Norway's sovereign fund seeks permission to invest in unlisted firms

(Adds background, detail)

OSLO, Jan 10 (Reuters) - Norway’s $1 trillion sovereign wealth fund, the world’s largest, is seeking permission to broaden its investments to potentially include unlisted companies, the central bank, which manages the fund, said in a letter to the Norwegian finance ministry.

A gradual build-up of unlisted stakes would most likely take place via investments in private equity funds or by investing alongside such funds, it said.

The Norwegian fund has in the past lamented its inability to make early investments in companies that grow rapidly without a stock market listing, naming sharing-platforms Uber Technologies and Airbnb Inc. among the missed opportunities.

The finance ministry last year asked the fund to review options for unlisted firms.

“If the Ministry does permit unlisted equity investments, the Bank will approach investment opportunities and build expertise gradually, invest via and alongside others,” the central bank said.

The fund said it would only go ahead with unlisted investments if and when this was expected to improve the trade- off between risk and return.

The wealth fund currently has a value of 8,500 billion Norwegian crowns ($1.06 trillion), with about 65.9 percent held in listed stocks at the end of the third quarter, 31.6 percent in bonds and 2.5 percent in real estate.

The equity portfolio, consisting of stakes in some 9,000 companies, corresponds to about 1.4 percent of all global listed shares. ($1 = 8.0375 Norwegian crowns) (Reporting by Terje Solsvik; Editing by Mark Potter and Jane Merriman)

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