The life of an investment is determined primarily by how long Norfund is additional.
We strive to create investment companies that are well managed, financially viable, and sustainable. The time horizon of the investment is decided when an investment is made, and a strategy defines how the Fund should exit.
We do not wish to remain as owner for longer than is necessary.
The investment period for loans and fund investments is clearly defined in the investment agreement. For equity investments, decision gates should be established. These are points at which an explicit position is required on whether to continue Norfund’s ownership or to exit. Norfund is a serious, predictable, long-term investor. At the same time, we do not wish to remain as owner for longer than is necessary.
After we exit an investment, the Norfund project team conducts an analysis of the investment. This describes the project and the key partners involved, the role of Norfund and the project’s performance in terms of business, environmental and social issues (E&S) and development outcomes. The report includes an analysis of the role of external factors (for example, political and economic), evaluates the quality of Norfund's work, and lists the lessons learned.
In 2015, we contacted former direct investments to learn about their development after Norfund's engagement had ended. A summary of the findings can be found here.
Reinvesting funds in new enterprises
Norfund’s operational income is the sum of interest, dividends and sale of shares.The income Norfund receives when we exit companies is added to our capital base and reinvested in new companies.Our success in increasing our assets has allowed us to invest at a greater scale than what would be possible with government funds alone.