NORWAY Trends and Developments Contributed by: Peter Hammerich, Sebastian Seeger and Didrik Krohg, BAHR
BAHR Tjuvholmen allé 16 0252 Oslo Norway Tel: +47 21 00 00 50 Email: post@bahr.no Web: www.bahr.no
Introduction Norway, though modest in population, boasts a strong and open economy historically fuelled by its oil and gas resources and complemented by a tech-savvy, financially skilled population. Private equity is a rel - atively newer phenomenon in Norway, with the first domestic funds launching roughly two decades ago. However, the sector keeps growing, boosted in large part by the country’s welcoming environment for for - eign investors. While the Norwegian sovereign wealth fund – the Government Pension Fund Global, frequently called the “Oil Fund” – is prohibited from investing domes - tically, the government-owned investment company Argentum (established in 2001) has played a pivotal role in developing local and regional private equity sponsors. Over the years, Norwegian-based manag - ers have steadily increased their fundraising capaci - ties. The result is a market environment where steady performance and the potential for incremental growth can make Norway attractive to general partners (GPs) and limited partners (LPs) alike. Regulatory Framework Norway’s regulatory framework for private equity is considered lighter than in many larger jurisdictions. Aside from generally applicable contract, corporate and marketing law, regulation primarily focuses on the manager rather than the fund. Central to the regulatory framework is the Norwegian Alternative Investment Fund Managers Act, which implements the EU Alter - native Investment Fund Managers Directive (AIFMD).
Because Norway is a member of the European Eco - nomic Area (EEA), it has committed to adopting much of the EU’s single-market legislation. This grants pri - vate equity sponsors access to passporting rights under the AIFMD framework. Notably, prior to the AIFMD (and Brexit), Norwegian sponsors often opt - ed to establish fund vehicles offshore, particularly in Guernsey or Jersey. Nowadays, managers with activi - ties in Norway are increasingly looking onshore, lev - eraging structures domiciled in Norway or other EEA jurisdictions, such as Luxembourg, to remain com - petitive in terms of regulation, taxation and investor familiarity. Legislative developments and delays Norway is not a member state of the EU but imple - ments the main body of EU legislation, including finan - cial market and asset management legislation, as a member state of the EEA. In essence, this is done by amending the EEA Agreement, followed by trans - position into Norway’s domestic legislation. These additional steps combined with a surge in financial regulatory rule-making cause delays in the Norwegian implementation of EU legislation. Examples include: • the Packaged Retail and Insurance-Based Invest - ment Products (PRIIPS) regulation, which came into effect in Norway on 1 October 2024 – almost a decade after it entered into force in the EU; • the rules on Cross-Border Distribution of Funds (CBDF), which were also implemented on 1 Octo - ber 2024 – five years later than in the EU; • the revised version of the European Long-term Investment Funds (ELTIF) regime (ELTIF 2.0) – this entered into force in the EU in 2024, but Norway
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