In view of the Ukraine war and other challenges, the head of the Norwegian sovereign wealth fund, which is filled with 1.2 trillion dollars, expects difficult conditions on the financial markets for a long time.
"The geopolitical consequences of the war are difficult to predict, but we are probably facing the biggest changes in 30 years," Nicolai Tangen said at a parliamentary hearing on Tuesday.
"There is little doubt that increasing friction between the superpowers and a reversal of globalization will affect markets."
"Bumpy Journey Ahead"
The Norwegian fund, which invests its assets in foreign stocks, bonds, real estate and renewable energy projects, has "nowhere to hide".
Instead, he must manage the risk that comes with exposure to global markets, Tangen said.
"All this taken together means that we have a bumpy journey ahead of us." In addition, there is high inflation with interest rates that are still very low and stocks are expensive.
Selling Russian stocks difficult
Founded in 1996, the world's largest sovereign wealth fund invests the income from the Norwegian oil and gas sector.
He holds shares in 9,300 companies worldwide, which account for 1.3 percent of all listed shares.
Tangen said it is currently unable to sell its portfolio of Russian stocks.
The market for these assets is currently not working.
At the end of 2021, the sovereign wealth fund owned Russian shares worth almost three billion dollars, which corresponds to 0.2 percent of the total volume.
In the meantime, the value of the Russian holdings is said to have fallen by at least 90 percent.
Every Norwegian has a paper fortune of $230,000 thanks to the sovereign wealth fund.
The aim of the fund is to share the oil revenues with future generations.