On Monday I was accepted into The Bright Network, a forum place for ‘young professionals’ to discover new opportunities and network with companies and each other. I received a phone call on Monday morning to confirm a few details and to engage in a small interview about my future career plans. Having mentioned to him that I had developed an interest in a particular area of finance, the person from Bright suggested I head down to the Bright Festival the next day in London to learn a bit more about that potential career route. Being rather bored in the build up to freshers, and eager to fill my time with something of use, I bought a ticket that evening and went to the Festival the next day.
The Festival itself was good, a sort of glorified graduate careers fair with lots of recognisable names from Morgan Stanley to Red Bull and Microsoft. It provided me with a great opportunity to network with some of the companies I was interested in and get an idea of the sort of candidates they look for on their internship programmes. Aside from the careers fair Bright had also organised some lectures/conferences going on about certain industries and companies. Although I profess I cannot remember which talker mentioned this, I was told one fascinating piece of information that shines a fantastic light on Norway and North Sea Oil.
The Norwegian Government has the largest fund on the planet.
When North Sea Oil (NSO) was first discovered the Norwegians set up a Pension fund where they split a portion of the surplus revenue from NSO. This fund has now become the largest fund on the planet, holding 1% of total equities worldwide, boasting a size of $729.2bn (31st March ’13) and also being the largest holder of european stock at 1.78% of total EU stocks.
When I discovered this the first thought I had was “Why the hell haven’t the Brits done this?”. Sure enough if we had the foresight that the Norwegians had about providing for their future generations we would be sitting on a hefty sum of money. Instead we used the money to prop up trade unions and industries that were failing and have subsequently now failed (i.e. mining).
What a shame.
But needless to say I won’t let this deter from the fact that the Norwegians have done a fantastic job. Data from the Norwegian ministry of finance shows the best and worse case scenarios for the fund in 2030:
Base (expected): $1.7tn
This fund has real potential to grow, and grow big. With 60% of it’s stock now in equities (up from 40%), we could be seeing some big gains, especially if a global recovery is on its way. The fund also follows an ethical code, something I’m really impressed at, which means companies such as British American Tobacco (due to tobacco production) and BAE systems (due to producing nuclear systems for the French government) are excluded from the portfolio.
Let me know what you think about ‘The Oil Fund’. Do we still have time in the UK to salvage surplus income from NSO to create our own, or will the Scottish get independence and claim it first?