Norway's sovereign wealth fund returned -14.1% in 2022, equivalent to a record loss in monetary terms of 1.64 trillion Norwegian kroner ($166.2 billion), amid what CEO Nicolai Tangen said was "a year for the history books."
However, the assets of the Government Pension Fund Global, Oslo, increased by 0.7%, to 12.43 trillion kroner.
The fund's 2022 return compared with a 14.5% gain in 2021. The investment return figure for 2022 was the second-worst since the sovereign wealth fund's inception.
"Well, there are decades where nothing happens and then there are years where everything happens, and 2022 for sure was a year for the history books," Mr. Tangen said, speaking at a news conference Tuesday.
Mr. Tangen and Trond Grande, deputy CEO at Norges Bank Investment Management — the in-house money manager for the fund — highlighted the energy crisis, interest-rate hikes, the war in Ukraine, geopolitical tensions and inflation as pressure points for global financial markets and the fund itself.
"We had multiple different emergencies and (crises) at the same time," Mr. Grande said, speaking at the same conference.
With asset markets registering their biggest losses since the global financial crisis, "there is just nowhere to hide" for the wealth fund, which is invested in 9,000 companies across 70 countries, Mr. Tangen added.
The fund's 69.8% allocation to equities returned -15.3% in 2022, with "a tough year around the world," Mr. Tangen said. The equity allocation gained 20.8% in 2021.
The fund's biggest equity exposure by geography is to the U.S. With that market down close to 20% last year, Mr. Grande said, "it shouldn't be a surprise that almost one-third, or maybe a quarter, of our negative returns came from our investments in the U.S."
The technology sector, which "has been roaring ahead the last few years, gave back quite a bit of territory last year," Mr. Tangen said. The fund lost 495 billion kroner on its technology exposure, a presentation for the fund's 2022 update showed.
At the other end of the spectrum, the fund's energy exposure gained 116 billion kroner, while financials added 49 billion kroner in terms of performance.
The fund's 27.5% exposure to fixed income returned -12.1% in 2022, compared with a -1.9% return in 2021. A 2.7% allocation to private real estate gained 0.1%, down from a 13.6% return in 2021. GPFG also has a 0.1% allocation to private renewable energy infrastructure, which gained 5.1% in 2022, compared with a 4.2% return in 2021.
Depreciation of the kroner vs. major currencies added 642 billion kroner to the fund, while inflows totaled 1.09 trillion kroner in 2022.
The fund's annual report will be published in March.
