Currently, the fund has about 3.3% of its assets in real estate, with a roughly even split between public companies and unlisted exposure. — Reuters
OSLO: Data centres are notably absent from the shopping list for the world’s largest sovereign wealth fund as it unveils a new strategy following a period of disappointing real estate results.
Norges Bank Investment Management (NBIM), Norway’s US$2.1 trillion fund, is shaking up its property division as part of its next three-year strategy, published on Wednesday.
However, data centres – one of the most hyped areas in real estate – won’t form a major part of the new approach, Alexander Knapp, head of global real estate, said in an interview with Bloomberg.
Currently, the fund has about 3.3% of its assets in real estate, with a roughly even split between public companies and unlisted exposure, Knapp said.
NBIM plans to increase this share to “somewhere between 3.5% and 7%” of the fund’s value by the end of 2028, he added. An increase of one percentage point would equate to roughly US$20bil.
NBIM is already exposed to data centres through its stake in Digital Realty Trust Inc, a US technology-focused real estate manager.
The team is comfortable investing in a liquid public company while keeping clear of private holdings in this fast-evolving space, Knapp said.
“I just think that when things are moving really quickly, you can either jump into the stream or you can just watch the fish go by,” he said.
“And I think we’re happy to watch the fish for a minute and see what happens.” — Bloomberg
