Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, should not be allowed to include private equity investments in its portfolio at this time, the government said on Friday, in a setback for the fund’s management.

Norway’s central bank, which runs the fund via an asset management unit, last year recommended allocating up to 5% of assets to private equity investments, currently corresponding to about $80 billion.

“We’ve concluded that we do not open to unlisted stocks at this time,” Finance Minister Trygve Slagsvold Vedum told a press conference, citing higher fees, lower transparency of information, and the need for a broad political consensus.

“We will continue to consider it.”

The need for stability at home at a time of political instability abroad was a factor in the decision, said Vedum’s deputy, State Secretary Ellen Reitan.

“In unstable times, it is important to have calm around important institutions, and the oil fund is definitely one of them,” she told Reuters. “It has been a success story, with a key factor being the calm surrounding its administration.”

The finance ministry said it plans to establish an independent expert council for the fund, and will use input from this council for future decision making on issues such as investment in unlisted equities, Vedum said.

The fund said it was positive that the ministry wants to further evaluate the option of including unlisted shares in its mandate.

“We look forward to meeting the Finance Committee in parliament later this month to answer questions on the topic,” it said in an emailed statement to Reuters.

Parliament previously rejected requests to move assets into private equity, arguing it could be too costly and would hamper the ability to judge performance on an ongoing basis.

Adopting private equity could have allowed the fund to invest in companies that have yet to be listed, including in fast-growing technology segments such as artificial intelligence.

Critics have said the fund should stick to a decades-long success formula of tracking global stock market indexes, while supporters of private equity argue that unlisted companies have become a larger and rapidly growing part of the economy.

The fund’s CEO Nicolai Tangen has said that the current combination of high interest rates and a relatively low number of new stock market listings globally means the time is ripe for the fund to deploy capital via private equity investments.

The fund, which invests Norway’s surplus oil and gas revenue abroad, is the world’s biggest single stock market investor, owning some 1.5% of all globally listed shares, and has stakes in more than 8,800 companies.

It also owns foreign government and corporate bonds, unlisted real estate in major cities and a small but growing portfolio of infrastructure projects such as wind farms.

Reuters