Norway's sovereign wealth fund manager warns collapse could become a reality

At a gathering of Norway’s elite in the southern town of Arendal, Nicolai Tangen warned that the country’s sovereign wealth fund - the largest of its kind with assets exceeding 22 trillion kroner - could disappear under certain scenarios. He emphasized that the fund’s rapid rise since its 1996 inception was partly due to luck and that such growth cannot be expected to continue indefinitely. Citing historical precedents where great fortunes vanished, Tangen reminded listeners that no state has ever maintained such wealth over the long term.

The fund, managed by Norges Bank Investment Management, allocates money to global equities, bonds and real estate and permits the government to draw up to 3 % annually without eroding the principal. Among the worst-case threats he named were nuclear war, biological terrorism, and a deep depression caused by a burst AI-stock bubble combined with a US-China trade conflict, which could erase at least 80 % of stock market value. He concluded that, given today’s tensions, the prospect of the fund’s collapse is not entirely implausible.