Norway's $468 billion sovereign wealth fund has mostly stopped buying equities from mid-2009 and has spent most of its inflows since on fixed-income securities in Europe, its chief executive told Reuters. The wealth fund, fed by Norway's oil and gas revenues, is Europe's largest equity investor.
It invests 50 percent of its global equity holdings in Europe and 60 percent of its fixed-income portfolio. "We effectively stopped buying equities last summer and we have used our cashflow to buy fixed income," Yngve Slyngstad told Reuters in an interview on Friday.
"To a large extent, therefore, with a falling euro, the majority of the cashflow is actually buying bonds in Europe. So we are net participants on the buying side," he added.
Asked about the fund's role during the ongoing financial crisis in the Eurozone, stoked by spiralling Greek debt, he said:
"We are an institution with one of the longest investment horizons and the possibility to contribute with risk capital in difficult situations, in that sense we are a stabilising force."
He said that problems with high state debts and deficits, coupled with high refinancing needs, were "not necessarily Europe-only issues."
"The situation in Europe is challenging but so is the situation in Japan and the United States," said Slyngstad.
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