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World’s Largest Wealth Fund Says Withdrawals Are Impacting Risk Management


The Norwegian government’s rising withdrawals could impact the country’s $890B wealth fund, forcing fund managers to take on more risk in the quest for higher returns.

Those outflows are “relevant for how we think about the risk-bearing capacity of the fund,” says deputy governor Egil Matsen at Norway’s central bank. The fund is a well-known backstop for global equity markets because it’s able to measure risk in decades, not years, Bloomberg reports.

So far the fund has been able to bear the $5.4B withdrawals that started this year, with fund managers saying income from bonds, real estate and dividends easily covers the outflows. [Bloomberg]