Norway wealth fund CEO at Davos sees slow investment returns in 2024

DAVOS, Switzerland — The chief executive officer (CEO) of Norway’s $1.5-trillion sovereign wealth fund, the world’s largest, told Reuters on Tuesday that return on its investments would likely be “slow” in 2024 due to high interest rates, persistent inflation and geopolitical risk.

The fund invests the Norwegian state’s revenues from oil and gas production in equities, bonds, property and renewable projects abroad.

It is the world’s largest sovereign wealth fund, holding stakes in more than 9,200 companies globally and owning 1.5% of all listed stocks.

“I think It’s going to be a very slow year. At best, pedestrian, because I think (interest) rates will be slow to get down,” Nicolai Tangen said in an interview during the World Economic Forum (WEF) annual meeting.

Inflation would remain persistent and come down “more slowly than I think is generally expected,” he said, citing higher freight rates for shipping, continuing high prices for fuel for transport and, “perhaps more importantly,” higher wages.

“Wage demand is pretty high across a lot of geographies, which means that inflation is really … sticky,” he said.

Mr. Tangen also cited the general geopolitical situation, with the continuing war in Ukraine and the war in Gaza, and “a lot of elections in many parts of the world” as a risk factor for the fund’s investments.

“We have geopolitical uncertainty in many places, that’s well known. And we have, you know, (company) valuations which are really relatively demanding,” he said.

“So I don’t see a lot of good news here.” — Reuters