- In today’s CEO Daily: Peter Vanham talks to Nicolai Tangen, CEO of Norges Bank Investment Fund.
- The big story: U.S. and Ukraine sign a mineral deal.
- The markets: Not bad!
- Analyst notes from EY on employment, Wedbush on auto tariffs, Convera on consumer confidence, and Goldman Sachs on equities.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Nicolai Tangen manages the largest publicly held financial fund in the world. But if Tangen, CEO of Norges Bank Investment Fund, is rattled by the recent global economic chaos, he’s not letting on. The Norwegian hedge fund manager spoke to Fortune recently and in his signature understated style commented that, “it is a bit of an earthquake in terms of the news flow. Big swings both ways. It’s been a period where it’s been good not to do very much.” Here’s how Tangen views the chaos and opportunity that this period presents.
In January, you said the best thing to do was the opposite of everyone else: sell US tech stocks, buy China. Is that also what you’ve done in recent months, and do you continue to be more bullish on China and bearish on the US? We have a pretty strict mandate. It’s not like we change geographical allocation often, because it is in the mandate. We were down 0.6% in the quarter. That’s $40 billion, which is less than 10% of the combined increase in the fund in the prior two years. We have big holdings in Europe, holdings in bonds. Indices were down temporarily, and they bounced back significantly. It was more in tech than in other sectors. And we’re a bit underweight there. People think that the year so far has been terrible. It has been surprisingly not terrible. We have stress tests, when you have disentangling of the superpowers in the world [our models project a worst case scenario of] a 35% decline in the markets. But the question is, is that what’s happening already?
Markets have been impacted very much by political decisions, especially by the Trump government. Can you comment on that? We observe that trade barriers are not good for the market. That decoupling of the superpowers is generally not good for trade or growth or inflation.
Europe has had a subdued economic and stock market performance for many years, and especially since the war in Ukraine. What’s the outlook now? European growth depends very much on what’s going on in America. Germany is going into negative growth numbers. It depends so much from industry to industry. SAP is doing well. Each industry has got their characteristics. If you’re a German car manufacturer, it’s different from a French luxury goods company.
Has your approach to ESG changed? On our side there has been no change. We continue to be invested in the large integrated energy companies. And we continue to buy renewable infrastructure assets. We have portfolio managers—some people have been weighing up these things. Some others haven’t.
What is the most promising use of AI at the fund? We believe we improved productivity by 15% last year, and we can do even more this year. You see how it helps to write code. We monitor risks across 9,000 companies across the world, and we can do that in real time. Before it could take days, now it takes minutes. We have a risk department that sells down positions with high risks as an outcome.
Looking at the world today, what is your overall outlook? It’s an incredibly interesting time. Big changes in the world, big changes in technology. It’s a fun time to be alive. I’m not even joking. Some people are depressed about what’s going on in the world. Or you can put on your student hat, be amazed, try to understand what is going on and make the best out of it. Grateful people have a better life. — Peter Vanham
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Contact CEO Daily via Diane Brady at diane.brady@fortune.com
This story was originally featured on Fortune.com
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