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Comment by panpanna | Hacker News Reader

> On average, the fund holds 1.4 percent of all of the world’s listed companies.

Why fund businesses in other countires? Shouldn't Norway try to set up some more industries at home?

Everyone claim Europe (was: EU) needs more VC funding to stop the brain drain. Well, here is a huge pool of money just waiting to be spent

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It's called diversification. If there's a downturn in Europe, you want to be insulated against it, otherwise you'd then be out of funds right when you actually need them the most.

It'd be like investing all your savings in your company stock. If the company falls into tough times and you get laid off, you'd be out of money exactly when you need it real bad.

Because it allows them to maximise the returns?

If it was Norway first the fund would be worth nowhere near a trillion dollars...

> Because it allows them to maximise the returns?

That's also the major difference between a sovereign wealth fund, designed to provide income to the state, and an economic development fund.

It also raises real political risks: it takes government competence over the long term to not use such a fund as an easy source of money for patronage-type "investments."

Norway doesn’t have the spare capacity to build more industries. Putting money into the Norwegian economy would just drive inflation.

The point is diversification. If norway’s economy collapses, they’ll still be invested elsewhere. It’s financially unwise to keep all your eggs in one basket

The Norwegian government also owns about a third of the total shares by value listed on the Oslo Stock Exchange. This fund is explicitly only investing outside Norway to prevent driving inflation, but the government also pumps a lot of money into Norwegian businesses.

Norway isn't in the EU, so that wouldn't exactly be home for them either.

My bad, you are correct.

Anyway, the point still stands. Why not make Oslo the silicon valley of Europe?

I mean the weather is roughly the same, give or take 30 degrees :)

Do we need another SV? It's not really putting out the same quality of startups it used to.

If all it took was money, New York would be Silicon Valley.

Do you think they need even more money?

The goal of this fund is not to invest in the economy, but to work as an insurance if ever the economy turns bad. If for whatever reason the economy in Norway collapses, they will still have this.

There is a legislation on vote these days to open up for investment in companies that is not listed on the stock market. A lot of greentech companies is not listed yet, this is the main driver for the change. They still have to publicly give out information about their investments.

They already do this. It's the global fund that's reached $1tn, there's another side which is the Norway fund, though it actually limits to the Nordic countries and is a significant presence in that market. The Norway fund is worth a fraction of the Global fund, but I have no idea what proportion of oil revenues go into each.

It's how countries conquer other countries in the new world. Before it was take over by region. Now it is franchise the region into a bunch of smaller obtainable parts. Norway is conquering the way it knows best.

I'm from the UK and I've never heard of anyone talk of 'brain drain' as a problem. I think you may be generalising from the tech sector.

Brain drain is very real in the european south. The UK is the sink where all this drain ends up thats why you don't hear about it.

Norway is not an EU member, so by funding EU industries, they would found businesses in other countries ;)

We have to follow all their legislations and fund a lot of EU investment (based on our GDP). So we are practically a member, but don't get to vote.

This is not a bad thing because EU is mainly about social benefits, and not politics as we are used to (and a lot of people think): http://www.europarl.europa.eu/legislative-train/

EU is also about single market (to simplify life for businesses), which iirc Norway is mostly part of.

They 're in the EEA and have interest in the growth of european economy in general (presumably to sell them their oil & gas? hehe)

Well, yes, they should, but the Norwegian economy is not really built around original ideas. Despite its current image as a country, Norway is historically incredibly conservative and this continues to be the case in their business environment. Nearly all of their exports are petroleum, fish or metal. Try to think of even a single notable Norwegian startup.. without Googling :-D

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