Norway’s Norges Bank Investment Management, one of the world’s largest sovereign wealth funds, suffered a record loss last year as the war in Ukraine along with inflation and interest rate hikes created “very unusual” market conditions that slammed both stocks and bonds.
The wealth fund reported a 1.64 trillion kroner (US$164 billion) loss for 2022, translating into a minus 14.1% return.
The Russia-Ukraine war, high inflation and rising interest rates “negatively impacted both the equity market and bond market at the same time, which is very unusual”, Chief Executive Officer Nicolai Tangen says in a statement on January 31. “All the sectors in the equity market had negative returns, with the exception of energy.”
Returns on Norges Bank’s equity and bond investments were minus 15.3% and minus 12.1%, respectively. The return on listed real estate investments was minus 31%.
Its investments in private markets posted gains, with unlisted renewable energy infrastructure returning 5.1% and unlisted real estate, 0.1%.
Geographically, only Norges Bank’s investments in Australia were in the black, with a gain of 2 billion kroner.
Its US investments lost 466 billion kroner, and investments in Germany and China lost 70 billion kroner and 47 billion kroner, respectively.
Norges Bank ended 2022 with 12.43 trillion kroner of assets under management, up from 12.34 trillion kroner in 2021.