Norway’s trillion-dollar sovereign wealth fund, the world’s largest, has been offloading its positions in London-listed companies, even as the UK government touts a resurgence for the City of London.
The fund, known as Norges Bank Investment Management (NBIM), has reduced its holdings in a number of prominent British firms over the past year. This includes trimming its stakes in companies such as HSBC, BP, and GlaxoSmithKline.
The move comes despite recent comments from Rachel Reeves, the Shadow Chancellor, who declared that the UK financial centre was entering a “new golden age”. Reeves praised the City’s ability to attract global investment and talent, hailing it as a hub of innovation and dynamism.
However, NBIM’s actions suggest a more cautious outlook. The fund, which manages Norway’s vast oil and gas revenues, has been steadily diversifying its portfolio away from the UK market in recent years.
Data from the fund shows that its UK equity holdings stood at £29.9 billion at the end of 2021, down from £33.7 billion a year earlier. This represents a decline of around 11% in its British stock investments.
In contrast, the fund has been increasing its exposure to other major markets, such as the United States and China. Its US equity holdings, for example, grew to £192.4 billion, while its Chinese stocks rose to £36.4 billion over the same period.
Analysts attribute NBIM’s shift in strategy to a range of factors, including concerns over the long-term economic prospects of the UK, as well as the fund’s desire to further diversify its risk.
“Norway’s sovereign wealth fund is taking a more cautious approach when it comes to the UK market,” said financial analyst, Sarah Johnson. “They’re looking to spread their investments across a broader range of geographies to mitigate potential downside risks.”
The fund’s move comes at a crucial time for the UK, as the government attempts to position the City of London as a global financial hub in the post-Brexit era. Reeves’ comments suggest a confidence in the UK’s ability to attract international capital and talent, but NBIM’s actions suggest a more nuanced outlook.
As the world’s largest sovereign wealth fund, NBIM’s investment decisions are closely watched by the global financial community. Its decision to scale back its London-listed holdings may raise concerns about the long-term competitiveness of the UK’s financial services sector.