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Norway sovereign wealth fund reports $164 billion loss

January 31, 2023

One of the world's largest investors — and its biggest sovereign wealth fund — has reported a record loss for 2022. The results end a three-year run of soaraway profits.

An oil and gas platform off Norway
The fund invests revenue from Norway's oil and gas sectorsImage: Abaca/picture alliance

The $1.3 trillion Norwegian sovereign wealth fund, which owns real estate and company stocks around the world, posted a record loss on investment of 1.64 trillion crowns ($164.4 billion; €151.9 billion) for 2022.

The sovereign wealth fund's largest loss previously was 633 billion crowns in 2008. 

How significant are the losses?

Fund overseer Norges Bank Investment Management said the war in Ukraine and a combination of other factors created an atypical business environment in 2022.

"The market was impacted by war in Europe, high inflation, and rising interest rates. This negatively impacted both the equity market and bond market at the same time, which is very unusual," said Chief Executive Nicolai Tange.

The yearly loss ends a record-breaking streak in which annual returns from the fund exceeded one trillion crowns in each of the three years from 2019 to 2021 — more than four trillion crowns combined.

Despite the latest figures, the fund — financed from levies on the nation's oil and gas industry  — is still bigger than it was the previous year. Because of new tax inflows, it stands at 12.43 trillion crowns compared to 12.34 trillion crowns at the end of 2021.

Storing carbon under the sea

How do the figures break down?

Revenue from the Norwegian oil and gas sector was used to establish the fund in 1996. Assets include stakes in some 9,300 businesses globally, representing about 1.3% of all listed stocks. The fund also has investments in bonds, real estate, and renewable energy projects.

The return on the fund's shares for 2022 was minus 15.3% with all equities outside the energy sector showing a loss. Return was minus 12.1% on fixed-income investments.

However, the fund did earn a positive 0.1% return on unlisted real estate and 5.1% for renewable energy projects.

rc/rt (AFP, Reuters)