NORWAY Trends and Developments Contributed by: Daniel Nygaard Nyberg, Ole Andenæs, Karoline Ulleland Hoel and Jens Fredrik Bøen, Wikborg Rein Advokatfirma AS
Introduction In 2025, the Norwegian alternative investment indus - try is still navigating a diverse range of challenges and opportunities, shaped by a combination of both local and global influences. The ongoing war between Russia and Ukraine, the conflicts in the Middle East, the persistent repercus - sions of the COVID-19 pandemic, and various other economic and socio-economic factors have culminat - ed in a rapid rise in inflation, which throughout 2024 and until more recently in 2025, catapulted interest rates in Norway to levels that had not been seen since the 1980s. These inflationary pressures have affected both Norwegian and international markets. However, in June 2025, the Central Bank of Norway unanimously decided to reduce the policy rate from 4.5% to 4.25%. While the economic outlook going forward remains uncertain, the recent policy rate reduction represents the start of a shift in monetary policy earlier than pre - viously anticipated. This indicates that the policy rate has likely peaked, and further reductions may follow depending on inflationary developments as well as other economic indicators. If the Norwegian economy evolves broadly, as currently projected, the policy rate will likely be reduced further in due course. Despite these economic headwinds, the resilience and adaptability of the Norwegian investment market stand as a testament to its robust nature. The trends under discussion in this article have exhibited a con - sistent trajectory over the years, underscoring the dynamic and lively character of the Norwegian alter - native investment fund (AIF) landscape. The Norwegian Alternative Funds Industry in 2025 Consistent growth in the AIF sector (with some exceptions) The Norwegian AIF market continues to exhibit robust growth across various areas. According to the 2024 report of the Financial Supervisory Authority of Nor - way (FSAN), there was a consistent increase in the number of AIFs managed and the total assets under management (AUM) in 2024, while the number of AIFMs remained largely unchanged. Alternative investments are still popular due to their potential for diversification and for risk-adjusted and/
or higher returns, even though reports show that 2024 was a slow year for the private equity market interna - tionally. Investment data company Preqin reports that in 2024 the average allocation in private equity rose to 15%. Despite the fact that the majority of investors felt that their private equity portfolio fell short of expecta - tions, a recent Preqin report established that 53% of investors plan to maintain their investments in private equity, which is the same proportion as the previous year. There was, however, a slight decline in investors wanting to increase their investments in private equity, from 31% to 28%. Although not classified as AIFs, the number of family offices in Norway has increased. These manage sub - stantial assets and frequently diversify into alternative investments, reflecting a global trend. A recent global survey by Deloitte of 354 single-family offices revealed that 30% of their portfolio consisted of investments in private equity, registering a growth from 22% in 2022. Larger AIFMs continue to dominate As in previous years, larger AIFMs continue to main - tain a stronghold in the Norwegian market, overseeing the majority of the total AUM. Approximately 70% of the total AUM is controlled by 13 managers with over NOK10 billion in AUM, according to the FSAN’s latest report from 2024. This dominance by larger managers is reflective of a global trend, where investors, amid economic uncertainties such as the Russia-Ukraine war and the conflict in the Middle East, gravitate towards experienced and established AIFMs. The inflation-driven tightening of the economy has led to heightened investor caution, further consolidat - ing assets with larger, more seasoned managers, and consequently causing first-time fund managers to struggle. Stagnant growth in mid-sized fund managers The reluctance of investors to commit substantial capital, given the prevailing high interest rates and economic uncertainties, also constrained the growth of mid-sized managers (NOK100–250 million), result - ing in a slight decrease in 2024. The “denominator effect” and market volatility Reports from Preqin show that limited partners still face the denominator effect in some way. This phe -
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