Tag Archives: Sovereign Wealth Fund

Bloomberg: Norway Unexpectedly Withdraws Cash From Massive Wealth Fund

Norway unexpectedly took almost $400 million from its sovereign wealth fund in August, marking the first such withdrawal in over a year as western Europe’s biggest petroleum producer takes advantage of its enormous piggy bank amid a decline in oil prices.

Tapping the world’s biggest wealth fund remains an extremely rare occurrence in Norway. The government made its first ever withdrawal in 2016, following a collapse in crude prices. The huge fiscal buffer that the fund represents has helped Norway’s central bank avoid some of the extremes of monetary stimulus to which its peers have had to resort.

The finance ministry in Oslo has yet to give an official reason for its latest withdrawal, which comes after oil prices dropped to a seven-month low in early August. But the decision suggests Norway’s budget may have grown more sensitive to volatility in commodity prices after the Conservative-led government spent record amounts of the country’s income from fossil fuels.

Read entire article HERE.

Bloomberg: Norway’s Fund Wants to Add Up to $100 Billion in U.S. Stocks

Norway’s wealth fund proposed overhauling its global holdings, calling for a shift away from Europe in a move that would allow it to boost its U.S. stock investments by as much $100 billion and take a larger chunk of the biggest technology companies.

In a letter sent to the Finance Ministry released on Tuesday, the $1 trillion fund recommended that its investments “be adjusted further towards float-adjusted market weights by increasing the weight of equities in North America and reducing the weight of equities in European developed markets.”

The response comes after the ministry last year asked the fund to review the geographical weighting that had been in place since 2012. The ministry on Tuesday said it would present its response in the “spring of 2020” and that any changes would be implemented gradually.

Read entire article HERE.

Bloomberg: Walmart Is Now Ethical Enough for Norway’s $1 Trillion Wealth Fund

Norway’s $1 trillion wealth fund revoked its more than decade-long exclusion on Walmart Inc. after the U.S. retailer tightened control over potential human rights abuses in its supply chain.

Walmart has made “positive developments” in monitoring its suppliers, the fund’s Council on Ethics said in a statement released Tuesday.

“Furthermore, the company engages actively in selected, high-risk areas in order to help bring about improvements in working conditions,” the council said in a letter. “There seem to be fewer reports of poor working conditions in Walmart’s supply chain now than there were before.”

The fund also decided to revoke exclusions to Grupo Carso SAB de CV, General Dynamics Corp., Nutrien Ltd.Rio Tinto Ltd. and Rio Tinto Plc, as well as Wal-Mart de Mexico SAB de CV, according to a statement.

Read entire article HERE.

Bloomberg: Here’s What Lawmakers Want to Do With Norway’s $1 Trillion Fund

Key lawmakers gave a nod to a range of changes for Norway’s $1 trillion sovereign wealth fund — from divesting some of its oil stocks, to an overhaul of its fixed-income holdings and tighter restrictions on coal investments.

But even after one of the most eventful years in the fund’s history, more change could be coming, documents from parliament’s Finance Committee revealed.

As the committee as expected late on Tuesday approved the government’s plans ahead of a vote in parliament, opposition politicians made a series of proposals and comments that show what the world’s biggest wealth fund may have in store in the years ahead, maybe even as soon as after the 2021 election.

Read entire article HERE.

Bloomberg: Norway’s Wealth Fund Surges $84 Billion in First Quarter

Norway’s $1 trillion wealth fund gained $84 billion in the first quarter, or $16,000 per citizen, after it took advantage of a market sell-off late last year to build its massive portfolio.

  • Return was 9.1 percent, or 738 billion kroner ($84 billion)
  • Stocks rose 12.2 percent, bonds 2.9 percent and real estate 1.7 percent
  • Fund held 69.2 percent in equities, 28 percent in bonds and 2.8 percent in real estate

The fund’s chief executive officer, Yngve Slyngstad, said it was an “exceptional” quarter with the third highest quarterly return on record and the highest ever in terms of kroner. He directed the fund to buy almost $30 billion in stocks in November through January to take advantage of a drop in prices and drive its holdings to near the 70 percent limit.

“The most significant change in the first quarter was probably the new signals from the Federal Reserve, which to a large degree drove the market,” he said in an interview after a press briefing in Oslo. “There have been very different views on macroeconomic developments from different actors.”

Read entire article HERE.

Reuters: Norway’s wealth fund extends ownership of New York real estate

Norway’s sovereign wealth fund will pay about $98 million dollars to extend the term of its ownership in a portfolio of New York properties and to acquire a few new, the fund said on Wednesday.

“The partnership between Norges Bank Investment Management (NBIM), Trinity Church Wall Street and Hines has extended the remaining 72-year ownership interest in the Hudson Square portfolio in New York City to a 99-year term,” it said in a statement.

Read entire article HERE.

Bloomberg: Oil Riches Put Norway on Divergent Path Toward Higher Rates

Norway’s oil riches are allowing the country to avoid the slow growth, slow inflation trap that’s gripping much of the developed world.

Its central bank on Thursday raised its key interest rate for a second time since September and signaled there’s more to come.

After delivering a rate increase to 1 percent, Norges Bank Governor Øystein Olsen flagged that another hike could come as soon as June, sending the krone soaring. The governor, who also oversees Norway’s $1 trillion wealth fund, acknowledged that his “oil-driven” economy sets his country apart.

Read entire article HERE.

New York Times: Norway Moves to Sell Some Oil and Gas Shares From Wealth Fund

LONDON — The Norwegian government has recommended that the country’s $1 trillion wealth fund sell its holdings in a group of companies that focus on finding and producing oil and gas.

The decision, the result of a two-year review of the giant fund’s investments in fossil fuels, is a compromise that stops short of divestment in major energy companies like Exxon Mobil and Royal Dutch Shell. But the fund’s activities are closely watched, and the move seems likely to increase concern among investors about the risks of holding such stocks.

Read entire article HERE.

Bloomberg: Richest Scandinavians Are in a Row Over How to Get $2.2 Billion

The richest Scandinavians are having a budget dispute involving Norway’s worst terrorist and a capsized warship.

The row started after Norwegian Prime Minister Erna Solberg proposed an “under the line” budget item to cover the estimated 19 billion kroner ($2.2 billion) it will cost to replace a navy frigate that collided with a tanker and ran aground last year and to resurrect the government offices destroyed in Anders Behring Breivik’s 2011 terror attack.

Read entire article HERE.

Bloomberg: Norway’s $1 Trillion Man

Norway’s clout in financial markets far outweighs its economy, which is about a 10th the size of Germany’s. The central bank’s $1 trillion investment fund plows the Nordic nation’s oil income into public securities and has become the biggest of its kind, owning about 1.4 percent of global stocks.

Yngve Slyngstad, who grew up in Asker just outside Oslo and received multiple graduate degrees before devoting himself to finance, has been chief executive officer of Norges Bank Investment Management since 2008. The 56-year-old spoke to Bloomberg Markets about what makes a good money manager, how he learns about China’s economy, his concerns regarding information monopolies, and why all investing is active. He also explains his strategy for private equity and real estate and why his fund’s potential divestment from oil company stocks has nothing to do with climate change concerns. While the fund now aims to be 70 percent in equities, he foresees that increasing in the future. “With the larger funds you have a larger buffer,” he says. “We have a higher risk tolerance.”

Read whole interview HERE.