The Norwegian sovereign wealth fund has reduced its exposure to companies in the Adani group following the risk assessments on the investments, the chief executive said, Nicolai Tangen.
The largest fund in the world based in Oslo holds approx 200 million dollars of shares in the Adani group, which collapsed after allegations of fraud by the investment firm Hindenburg Researchcompared to the previous exposure of about 800 million dollarsNicolai Tangen told reporters on Tuesday.
“We have decreased our exposure to the group in recent years,” resulting in a “massive (underweight) underweight position,” Tangen said. “We sold holdings based on negative risk assessments,” she added.
The oil fund trimmed its positions in Adani companies due to risks such as potential corruption, environmental damage e human rights violations.
The comments come after allegations of market manipulation and fraud by hedge fund, Hindenburg Research, are putting pressure on the Indian conglomerate and founder, Gautam Adani.
The fund’s holdings in the companies of the Adani group
Norway’s $1.3 trillion fund largely tracks a benchmark index set on a formal framework mandated by parliament. The fund seeks to make the most of despite having limited leeway to try to beat the benchmark against which it is measured, including underweighting some stocks based on risk assessments.
According to Bloomberg reports, after an update of the fund’s portfolio it is noted that at the end of 2022, the fund held a stake of 84 million dollars in Adani Total Gas, a position of 53 million dollars in Adani Green Energy e 63 million dollars in Adani Ports & Special Economic Zone. The latter placed under observation by the fund for the unacceptable risk that the company contributes to serious violations of people’s rights in wartime conditions.
Norwegian sovereign wealth fund, red on balance by $164 billion in 2022
Just today the fund posted record losses of $164 billion for the full year 2022, due to the “very unusual” market conditions.
The Government Pension Fund Global, one of the world‘s largest investors, returned a return of -14,1% for last year, which is a 0.88% better performance than the return of its benchmark index.
The fund’s previous largest loss was 633 billion of crowns in 2008 during the global financial crisis.
The world‘s largest fund has been active since the 1990s to invest state extra profits related to the Norwegian oil and gas sector. To date, the fund is invested in over 9.300 companies in 70 countries around the world.