Norway wealth fund CEO rejects calls to sell Russian assets now

Bloomberg

Norway’s $1.3 trillion sovereign wealth fund’s chief executive, Nicolai Tangen, is resisting pressure to sell Russian stocks now, saying doing so would be akin to a “gift” to the country’s oligarchs.
The Oslo-based fund is the world’s biggest owner of publicly traded companies with a portfolio of about 9,000 stocks, and has about 0.2% of its assets invested in Russia. An opposition party and other Norwegian organizations have demanded it dump Russian investments after President Vladimir Putin launched a full-scale invasion of Ukraine on Thursday.
“If you think that selling out of Russia is something that will negatively affect Russian oligarchs, the opposite will happen,” Tangen said in a phone interview on Friday. “If we sold out of Russia now, it would be a wrapped gift to the oligarchs who buy our shares. If we sell cheap stocks, they get a gift.” The wealth fund hasn’t bought any Russian stocks either, he added.
The fund, Norges Bank Investment Management, is down “between 7%-8%” this year, Tangen said. It returned 14.5% in 2021, equivalent to about $176 billion, mainly thanks to gains in technology and banking stocks on record pandemic stimulus, with Tangen warning last month an era of lower returns is ahead.
The war clouds the economic outlook, Tangen said, adding “it’s an unclear geopolitical situation and an unclear inflation situation, and how the central banks will move.”
Created in the 1990s to invest Norway’s oil and gas revenue abroad, the fund has followed strict ethical guidelines since 2004, including bans on certain weapons, tobacco and most exposure to coal. When asked about the ethical aspects of investing in Russia in the current situation, Tangen said the fund follows the guidance from its independent ethics council.
“We are broadly invested worldwide in over 9,000 companies, according to an index that also includes Russia,” he said. “We are a relatively index-linked fund. It is natural that we have ownership interests in companies that are included in the index.”