The head of Norway’s $ 1.4 trillion investment fund has said he expects a long period of weakness in financial markets and warned that inflation could be the biggest challenge, according to Bloomberg.
Nicolai Tangen, chief executive of Norges Bank Investment Management, told the German Frankfurter Allgemeine Zeitung that after achieving an average return of 6% for a quarter of a century, the fund is now preparing for “a decade of lower returns”.
“It can even become negative,” the newspaper said in an interview. “We just have to accept it. The future will be less attractive to us than the past.”
Tangen said the “biggest potential problem” for the fund – the world’s largest stockholder – is inflation, and predicted that a rise in prices could have “much more serious consequences than is generally considered at present “.
“I see inflation everywhere: in fares, in metal and food prices, in construction costs and gradually in wages,” he told FAZ.
“As a long-term investor, we do not have so many options,” he added. “We have nowhere to hide from inflation.”
Composed of wealth derived from the exploitation of oil and gas in the North Sea, the Norwegian investment fund has a portfolio of approximately 9,000 shares. He has left hundreds of companies over the past decade to avoid the environmental, social and governmental risk he says they posed.
Source From: Capital