Norway oil fund CEO says he’s more nervous after record returns

Norway’s sovereign wealth fund, valued at $2.3 trillion, reported a record first-half return of 1.4 trillion kroner ($150 billion), according to its CEO, Nicolai Tangen. In a Bloomberg TV interview, Tangen stated that such a high return "is as good as it gets." However, he also expressed increased nervousness and caution following the rally, citing various risks.

Tangen mentioned concerns about AI valuations, geopolitical tensions, and potential economic downturns. Earlier this year, an expert panel had warned about political risk, particularly in the United States, and concentration risk within the technology sector. The fund had previously cautioned that an AI bubble could potentially cost it 35% of its value.

Geopolitical risks, including global investment restrictions and severe tariffs, could lead to a loss of up to 37% of the fund's value in a worst-case scenario. The top 10 holdings of the fund constitute nearly 25% of its total value, which is a new level of concentration risk for the fund. Founded in the early 1990s, the fund now owns approximately 1.5% of the world's listed companies and invests in various asset classes such as equities, fixed income, real estate, and renewable infrastructure, all outside Norway.