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Norway's $1.3 trillion wealth fund, one of the world's largest investors, should assess whether to begin investing in unlisted equities, the finance ministry said on Friday, which, if it went ahead, would be a brand new asset class for the fund.
A decision of whether to do so is ultimately up to the country's government and parliament.
The fund pools the Norwegian state's revenues from oil and gas production and invests them abroad in stocks, bonds, property and unlisted renewable projects.
Managed by a unit of the central bank, it is invested in more than 9,200 companies globally and owns on average 1.5% of all the world's listed stocks.
"The bank is asked to assess the different aspects of unlisted stocks to form the basis for the ministry's assessment of this question," the finance ministry said in its annual recommendation to parliament.
The fund is positive to investing in unlisted equity, saying in a Jan. 6 letter
to the ministry it was "seeing more and more indications that a larger share of value creation is taking place in the unlisted market".
In that letter it said that an expert group appointed by the finance ministry in 2017 estimated that the unlisted market was 5% of the size of the listed market.
"The Bank's updated estimates suggest that this figure is now around 8%," it said then.
The fund's current size is equivalent to $242,000 for every Norwegian man, woman and child.
Norway's minority government needs the support of other parties in parliament to pass its proposals.
(Reporting by Victoria Klesty and Terje Solsvik, editing by Gwladys Fouche)