Norway wealth fund could disappear, manager says

Norway's $2.3 trillion sovereign wealth fund could disappear, its manager Nicolai Tangen said Tuesday, warning that current global tensions made that possibility less implausible.

Tangen, chief executive of Norges Bank Investment Management, said in a speech in Arendal that the fund's rapid growth could not be expected to continue at the same pace.

The fund, often called the oil fund, is fuelled by the Norwegian state's oil and gas revenues. It has grown from under 2 billion kroner at its creation in 1996 to more than 22 trillion kroner, or $2.3 trillion, today.

Invested in equities, bonds and property around the world, the fund is designed as a long-term vehicle to benefit future generations. Norway's government is currently allowed to draw up to three percent from it each year to balance public finances, a ceiling corresponding to the estimated annual return on investments.

Tangen cited extreme risks such as nuclear war or biological terrorism. He also mentioned a prolonged depression that could be triggered by the bursting of an “AI bubble” in high-priced artificial intelligence-linked stocks, combined with a trade war between the United States and China.

He said that even though more safeguards are now in place, a scenario comparable to the 1929 Great Depression could wipe out “at least 80 percent” of the value of stock market investments.