NORWAY - The Government Pension Fund Global has made its first investment in real estate since it received the okay to invest in property in March.
The fund will pay £448m (US$730m) to buy a 150-year lease on a 25% stake in The Crowne Estate's Regent Street properties in London, the fund said today.
In March, the Ministry of Finance directed the sovereign wealth fund to invest up to 5% of its assets in property, while reducing its allocation to fixed income.
But the NOK2.9trn ($507bn) fund is still searching for ways to diversify its ever-expanding assets. In October it asked to be able to invest in private equity and infrastructure. The Ministry of Finance said it would comment on the proposal in the spring.
The fund also said it returned 7.2% in the third quarter on the back of gains in the global stocks and bond markets. Equity investments returned 9.8% while fixed income returned 3.4%.
Officials at the Global fund said the best performing stocks for the quarter were BP, Telefonica and Royal Dutch Shell.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.