World’s largest sovereign wealth fund posts $110 billion in Q1 profit

Norway's sovereign wealth fund looking at 'a meaningful allocation' in real estate and infrastructure, deputy CEO says

Norway’s giant sovereign wealth fund on Thursday reported a first-quarter profit of 1.21 trillion kroner ($110 billion), supported by robust returns on its investments in technology stocks.

The so-called Government Pension Fund Global, the world’s largest sovereign wealth fund, said it had a value of 17.7 trillion kroner at the end of March.

It described the relative return through the first three months of the year as “good” for equity and fixed income investments, but noted that “this was offset by weak results from real estate, leading to a negative result overall.”

The return on the fund’s equity investments in the first quarter came in at 9.1%, while the yield on the fixed income investments stood at -0.4% and investments in unlisted real estate returned -0.5%.

Norway’s wealth fund said the return on its unlisted renewable energy infrastructure was -11.4%.

The fund’s return was 0.1 percentage point lower than that of the benchmark index.

The facade of Norway’s central bank, also known as Norges Bank, in Oslo, Norway.

Bloomberg | Bloomberg | Getty Images

One of the world’s largest investors, Norway’s sovereign wealth fund was established in the 1990s to invest the surplus revenues of the country’s oil and gas sector. To date, the fund has put money in more than 8,800 companies in over 70 countries around the world.

Trond Grande, deputy CEO of Norges Bank Investment Management, said in a statement that the fund’s equity investments had a “very strong return in the first quarter, particularly driven by the tech sector.”

When asked by CNBC whether he was concerned about the recent weakness for some of the so-called Magnificent Seven U.S. tech behemoths, Grande said it appeared that market participants were now reassessing their outlook for these companies.

The Magnificent Seven are Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla.

“We had the Mag[nificent] 7 last year, and it has turned into a little bit more of [a situation of] dispersed returns for those seven names this quarter, with Nvidia still pushing ahead on the back of the AI enthusiasm. And then you see some more weakness in other names like Tesla and Apple,” Grande told CNBC’s “Street Signs Europe” on Thursday.

“So, obviously the market is taking a more nuanced look at these companies and their business models,” he added.

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