At the end of the first half of 2021, the Norwegian Sovereign Fund (Government Pension Fund Global) earned 990 billion crowns or 95 billion dollars coming mainly from its investments. In a statement, the head of the fund, Nicolai Tangen, noted the particularly strong performances of the sectors of energy and finance but also of technology stocks and health.
Created 25 years ago, the Norwegian sovereign fund posted a return of 9.4% as of June 30, mainly driven by its equity investments which represent 72.4% of its portfolio and which have appreciated by 13.7%. Bond investments, which represent 25.1% of assets, lost 2% while real estate investments (2.4% of the portfolio) gained 4.6%. As for investments in unlisted renewable energy projects, they posted a negative return of 1.9%. Present around the table of some 8,800 companies around the world at the end of 2020, the Norwegian sovereign wealth fund is the largest in the world with more than $ 1,100 billion in assets, controlling nearly 1.5% of the global market capitalization .
The fund aims to place state oil revenues in secure and profitable assets in order to finance public spending. This example of oil revenue management seems much more judicious than the “Future Generations Fund” system set up by some African states. Norway shows Nigeria, Congo and, among others, Gabon, that one should not budget the proceeds of exports but rather develop an effective investment policy in the financial markets in order to finance the investments of the State.
Useful to point out, the head of the Norwegian fund, Nicolai Tangen, is not an official from the Treasury or the Ministry of Finance, but rather a finance wolf recruited from the market. Founder of the hedge fund AKO Capital, the man was a billionaire before taking office and accepted the proposal of the Bank of Norway (the fund’s regulator) knowing that he would personally make less money than hedging. To avoid any conflict of interest, Nicolai Tangen a M. Tangen transferred the 43% he held in AKO Capital to his charitable foundation, AKO Foundation, dedicated to education, the climate cause and the arts. Likewise, to take the job, the financier liquidated all his investments in the stock market to lodge them in ordinary bank accounts.
