Norway: Is World’s Largest Sovereign Wealth Fund Too Big?

Most of Europe is struggling with how to reduce spending, but not Norway.  It has invested the income from its oil and gas reserves so wisely that it now has what many consider to be the world's largest sovereign wealth fund, estimated to be worth $1tr (£0.6tr) by 2020.  But is that too big?

'Working with reason'
In Norway's case money makes money. Profits and taxes from the oil and gas industry give the government oil fund $1bn a week.

The fund holds on average 1% of the world's shares.  In Europe it owns more than 2% of all listed companies.

That is thanks both to the hydrocarbons - and the fact that successive governments have stuck to the political consensus that profits from the oil industry should be invested in the fund.

The government mandate for the fund specifies that it must be transparent and open.  It also aims to influence the way in which the companies it invests in behave.
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Multiple funds?
Norway is one of the richest countries per head of population.  Europe's debt crisis feels very, very far away in this affluent corner of the continent.

At Norway's Business School in Oslo however, the professor of asset management, Bruno Gerard, believes the fund must be changed.

"It's going to be impossible to keep managing this immense flow of money within one organisation," he says.

"It is very well-managed, but... a small mistake on a big fund can have enormous consequences.  It would be far less damaging if we had several smaller funds."

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