Norway sovereign fund chief sets sights on China
Slyngstad hopes to broaden the sovereign fund's asset mix to include infrastructure and private equity amid plunging interest rates
Once a year, the man running the world's biggest sovereign wealth fund travels around China for a week.
Though assets from that country only make up about 1.5 per cent of the US$860 billion Norwegian wealth fund's portfolio, Yngve Slyngstad, its chief executive, says almost all investment decisions are affected by what happens in China.
Understanding what is poised to become the world's largest economy is crucial for Slyngstad as he manages a fund that Norway predicts will reach US$1 trillion in less than three years. He will be in China this month, visiting Beijing and other cities.
"Every time I come back, my perception of China has changed," Slyngstad said. "There has been more and more of a question mark over what's the next step for that economy. The uncertainty among investors is partially due to the fact that it's more difficult to know what's happening in that large economy than in any other."
The composition of the global economy, including the future of emerging markets, will be decided in China, Slyngstad says. Yet growth in China, which by some calculations is already bigger than the United States economy, is slowing and the lack of transparency is making it hard for investors to understand why.
Apart from A shares, the Norwegian fund can also invest in mainland China through listed companies in Hong Kong. Its exposure to the country amounted to 2.7 per cent of its stocks in the third quarter, up from 2.5 per cent at the end of 2013. Holdings include oil producer and explorer PetroChina and Industrial and Commercial Bank of China, the world's largest lender by assets.