Norway’s oil fund loses 1.3 trillion kroner ($125bn) in coronavirus crash

Norway's sovereign wealth fund, the world's biggest, has lost 1.33 trillion kroner ($125 billion) since the start of 2020 as markets collapse under the COVID-19 pandemic, its management said Thursday.

Norway's oil fund loses 1.3 trillion kroner ($125bn) in coronavirus crash
Nicolai Tangen was on Thursday announced as the fund's new chief executive. Photo: Tony Colli/NBIM
As of March 25, the fund was valued at 10.1 trillion kroner ($949 billion) after registering a negative return of 16 percent since January. Its share portfolio, which accounts for about two-thirds of its holdings, reported a 23-percent drop.
“It's a strange time for society, it's a strange time for the economy, and it's also a strange time for global financial markets,” the outgoing head of the fund, Yngve Slyngstad, told reporters.
The decline does not totally wipe out last year's gain of 1.69 trillion kroner, he said, while warning that other “major fluctuations” could be expected in the weeks to come.
Slyngstad also noted vast differences between sectors, with oil stocks shedding 45 percent and the tech sector losing 14 percent.
Bonds and real estate, which make up the rest of the fund's portfolio, have posted flat returns since the start of the year.
Norway's central bank, which oversees the fund, announced Slyngstad's successor on Thursday. Nicolai Tangen, an investor born in 1966 who founded the private investment fund AKO Capital, is to take over in September.
Norway's oil revenues are placed in the sovereign wealth fund — commonly referred to as the “oil fund” but formally known as the Government Pension Fund Global — which Oslo then taps to balance its budget.
It is one of the biggest investors in the world, with holdings in more than 9,200 companies, or 1.5 percent of global market capitalisation.

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Norway oil fund loses 18 billion euros in first half of 2020

Norway's huge sovereign wealth fund, the world's biggest, lost 188 billion kroner (18 billion euros, $21 billion) in the first half of the year as the global economy reels from the Covid-19 pandemic, the central bank said Tuesday.

Norway oil fund loses 18 billion euros in first half of 2020
Unusually empty slopes and ski lifts in Hemsedal in April. Photo: AFP

The fund, in which the Norwegian state's oil revenues are invested, was hit by plummeting share prices, with stocks accounting for 69.6 percent of its investments.

Its share portfolio posted a negative return of 6.8 percent in the first six months of the year.

At the end of June, the fund was valued at 10.4 trillion kroner (989 billion euros), up from the 9.98 trillion kroner seen at the end of the first quarter.

“The year started with optimism, but the outlook of the equity market quickly turned when the coronavirus started to spread globally,” the fund's deputy chief executive, Trond Grande, said in a statement.

“However, the sharp stock market decline of the first quarter was limited by a massive monetary and financial policy response,” he added.

Real estate investments, which represent 2.8 percent of the portfolio, also posted a negative return, of 1.6 percent, while bond investments, which account for 27.6 percent of assets, posted a gain of 5.1 percent.

“Even though markets recovered well in the second quarter, we are still witnessing considerable uncertainty,” Grande said.

The fund is meanwhile still mired in controversy over the appointment of a new chief executive.

Nicolai Tangen, a billionaire who founded the AKO Capital hedge fund in London, is due to take over the fund on September 1st, replacing Yngve Slyngstad who is retiring.

But critics have complained about Tangen's possible conflicts of interest, as well as his use of tax havens.

The central bank has meanwhile been criticised for irregularities in the recruitment process.

As a result, some major political parties are opposed to Tangen's appointment, and it remains up in the air.

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