In the world of sovereign wealth, where Middle Eastern and Singaporean funds are tigers, the Norwegian fund is a tusker. Norges Bank Investment Management (NBIM) is the single largest owner in the world’s stock markets.
Norges Bank Investment Management owns 1.4% of entire global equity markets free-float through holdings in about 9,000 companies, according to the company’s data. Equities are only 70% of their portfolio. Total assets are ₹115 trillion ($1.4 trillion). It raked in $143 billion in the first half 2023. The third quarter 2023, it lost $34 billion, primarily from currency fluctuations.
Several fund managers in the US manage multi-trillion assets. This includes enormous investments in their exchange-traded funds (ETFs) and other equity products. BlackRock, the biggest, is the only fund manager to hit $10 trillion assets. The Vanguard Group, the second-largest, has vaulted $8 trillion, followed from far by State Street Global and Fidelity Investments.
Total market capitalization of global stock markets is $112 trillion in July 2023. It is up $14 trillion from $98 trillion at the end of 2022, as per a September 2023 report from Statista Research. Market capitalization of the New York Stock Exchange and Nasdaq – two US exchanges – are $47 trillion. Stocks listed in the Asia-Pacific region are valued at $34 trillion.
In India, Norges Bank Investment Management equity investments are worth about ₹70,000 crore. Among the largest holdings in India are the blue-chip stocks including Infosys, HDFC Bank, Axis Bank, Bharti Airtel, Mahindra, Varun Beverages, Sun Pharma, Maruti Suzuki, and Grasim Industries.
In February 2023, it sold $200 million worth of investments in Adani Group companies during the Hindenburg report selloff. “We have no exposure (in Adani Group) left,” said NBIM’s risk monitoring head Christopher Wright. Recent bulk-purchases-data shows their investments in FSN E-commerce Ventures, HDFC Life Insurance, and the logistics firm Delhivery.
Norway, which means ‘northwards,’ is in the limelight as Jon Fosse, a Norwegian renowned for mystic realism, won the Nobel Prize in Literature for 2023.
The pension fund, popularly known as the Norway Oil fund, is the largest producer of Natural Gas outside the Middle East. Petroleum accounts for a quarter of its GDP.
In a statement on October 6, Norges Bank Investment Management announced plans to finance 22% of Norway’s budget for 2024. This amounts to ₹3.128 trillion, 2.7% of NBIM’s net worth. One Norwegian Kroner is ₹7.6. The Ministry of Finance allows NBIM to contribute 3% of the net value to the budget.
The fund is like “a perpetual savings account,” its mission statement said, “to safeguard and build financial wealth for current and future generations.”
Earlier this month, NBIM was awarded Europe’s top asset management firm by the Institutional Investor magazine. It is also one of the largest real estate investors, globally. The fund house operates from Oslo, Singapore, New York, and London.
NBIM suffered heavy losses in 2022, about $164 billion, in sync with global markets. While the Sensex bucked global trends to surge 4.4%, the Dow Jones dropped 8.8% in 2022, the worst since 2008.
Nicolai Tangen, chief executive of NBIM, is also a podcaster. Guests at his profound conversations include British-billionaire Richard Branson, Spanish-banker Ana Botin, and Ajay Banga, president of the World Bank.
NBIM, founded in 1998, is vocal on activism in finance. Nina Galbiati and Carine Smith Ihenacho, speaking on ‘decarbonizing’ at New York Climate Week 2023, representing NBIM, urged investors to spend “more time, not less, on understanding the financial implications of climate change.”
Abu Dhabi Investment Authority (ADIA), the largest sovereign investment vehicle in the Middle-East, is second largest globally. It has about $1 trillion assets. Saudi Public Investment Fund manages $700 billion assets. Qatar Investment Authority owns $500 billion.
GIC of the Singapore government has $770 billion assets as of September 2023. Smaller sovereign funds include Brunei Investment Authority of the Sultanate, Mubadala Investment Company, and Temasek.