An Analysis on Norwegian Wealth Fund

Abstract

Sovereign wealth funds that emerged in the mid-twentieth century and of which numbers have largely grown since then have become an important issue at the heart of discussions today. Although initially based on commodities such as oil and gas, there are many sovereign wealth funds based on budget, current account surplus, and privatization revenues recently. Sovereign wealth funds based on commodities, however, compose the majority. The Norwegian Wealth Fund has the largest value of assets and is the most known of those. Norway’s adventure of sovereign wealth funds began in 1969 with the discovery and processing of oil within the continental shelf. Then, the use of excess revenue from oil was discussed for many years. After these discussions, the Norwegian Wealth Fund was established in 1990 with the name of the Government Petroleum Fund to utilize the income surpluses. The fund, renamed as the Government Pension Fund Global in 2006, has become the largest sovereign wealth fund of all as well as the commodity-based ones today. In this study, the Norwegian Wealth Fund has been analyzed in terms of fund mechanism and organizational structure to provide an insight for Turkey Wealth Fund which is established in 2016 and considered a new Wealth Fund in the world. Particularly good governance, transparency, implementation of a fiscal rule, and a dynamic structure of governance are the main factors behind the development of the fund.

Keywords

• sovereign wealth funds
• the government pension fund-global
• norwegian wealth fund
• the government petroleum fund of norway