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.
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.