Norway has made around ?240 billion in profits from its vast oil activities and now plans to invest ?14.5 billion of this in the UK real estate market in 2009, The Daily Telegraph has reported.
This would be in addition to the ?8.5 billion of government bonds that Norway already holds in the UK. The country would enter the market slowly in the first half of the year, according to Norges Bank Investment Management which is overseeing the investment.
Executive director Yngve Slyngstad said: ?The UK will be one of the first markets we will go into. We look for markets with transparency and a good legal system to protect our investment.?
Norway discovered oil in the North Sea in 1969 and set up the Government Pension Fund ? Global to manage the considerable funds accrued. The fund is the largest European investor in equities. The company plans to increase its investment to 60 per cent from 50 per cent at the end of last year, and Mr Slyngstad plans to put 5 per cent of this into real estate.
Last summer oil prices shot up to over $147 a barrel. Norway invested the equivalent of ?38 billion of its ?40 billion into global financial markets. The country keeps money aside for investment in its domestic market.
However, the fund made severe losses last year when global markets were at an all-time low. Losses on its investments amounted to 23 per cent, ?66 billion.
Consequently, Norway lost all the profits made in her last 12 years? activity in the financial markets. According to Bloomberg, Norway?s investments last year in the large European and US banks lost the equivalent of $500 million.
Mr Slyngstad added that the fund still maintains its original investments made prior to the economic crisis and that all the investments are made for the long term.
In Madeira island in Portugal we have had some real estate investors from Norway