Sunday, December 23, 2012

WSJ - Norway and its oil money Looks to Spread Wealth to U.S

Why does this feel like another real estate bubble coming up?
The Norwegians are coming to America.

After spending the past two years increasing investments in Europe's high-end real-estate market, Norway's $682 billion oil fund is poised to hit the U.S. property market with deep pockets and an appetite for big-ticket deals.

The Norwegian Government Pension Fund Global—the world's largest sovereign-wealth fund—has been in talks about deals with potential real-estate partners in New York, Washington and Boston in recent months. On Friday, the Norwegian government gave the fund's manager, Norges Bank Investment Management, the green light to start spending.

Karsten Kallevig, the fund's real-estate chief investment officer, said in an interview last week that NBIM could pull the trigger on its first U.S. deal as early as the first quarter of 2013, likely with a focus on either high-end retail or office space.

The wealth fund, which gets revenue tied to Norway's oil and gas industry, arrives in the U.S. property market at a time when values in New York and other major cities are considered high, and a flood of other foreign investors, including Chinese buyers, are looking for deals.

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