Penalized by the fall of the stock market, the sovereign wealth fund of Norway lost 18 billion euros in 2020

Norway’s colossal sovereign wealth fund, one of the biggest in the world, lost 188 billion crowns (18 billion euros) in the first half of the year in a global economy paralyzed by the Covid-19 epidemic, the Bank of Norway announced on Tuesday (August 18).

Fed by oil revenues from the Norwegian State, the fund was penalized by the fall in shares, which represent more than two-thirds (69.6%) of its investments: they fell by 6.8% over the first six months. As of June 30, the fund weighed 10.4 trillion crowns (989 billion euros), still more than at the end of the first quarter (9,998 billion crowns), thanks to significant and swift political action.

“The year started with optimism, but the outlook for the stock markets quickly turned when the coronavirus started to spread around the world”, noted the fund’s number two, Trond Grande, in a statement. “However, the sharp decline in the first quarter was limited by a massive response from monetary and financial policies”, he added.

A controversial appointment

Real estate investments, i.e. 2.8% of the portfolio, also posted a negative return (-1.6%), while bond investments (27.6% of the portfolio) posted a gain of 5.1%. %. “Even if the markets rebounded well in the second quarter, we still see a lot of uncertainties”, emphasized Mr. Grande.

Supposed to grow the oil revenues of the Norwegian state, the fund is, moreover, still bogged down in a controversy over its direction. Nicolai Tangen, a billionaire who founded hedge fund AKO Capital in London, is due to take the reins of the portfolio on 1^is September, replacing Yngve Slyngstad.

But voices have criticized possible conflicts of interest as well as its use of tax havens to shelter its investments, while the Bank of Norway, which oversees the fund, is singled out for irregularities and breaches of the law in the process. recruitment.

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