Why? American just work harder, says CEO of Norway’s $1.6 trillion oil fund. So, the CEO of the Norwegian Investment Fund prefers American companies over Europeans.
European companies are falling behind their American counterparts in innovation and technology because of a “mindset issue,” says Nicolai Tangen, CEO of the $1.6 trillion Norges Bank Investment Management. People in Europe are less ambitious and more risk-averse than their US peers, he claims.
Nicolai Tangen leads Nordic behemoth investment fund, which governs the revenue earned by Norway’s oil and gas resources, with the aim of ensuring its benefits are distributed fairly between current and future Norwegian generations.
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“We are not very ambitious. I should be careful about talking about work-life balance, but the Americans just work harder,” he said in an interview with the Financial Times,
Under Tangen’s leadership since 2020, and over the past decade, the $1.6 trillion fund has invested more and more heavily in the U.S. instead of its closer neighbors in Europe – and it’s no coincidence.
The Norwegian Sovereign Wealth Fund, the largest in the world, has more than 11,000 investments in 72 countries — about 71% of which are in equities. Last quarter, the fund reported a record $213 billion in profit, boosted by its holdings in booming tech stocks like Microsoft, Apple, and Nvidia.
“There’s a mindset issue in terms of acceptance of mistakes and risks. If you go bust in America, you get another chance. In Europe, you’re dead,” said Tangen.
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CEO of Norwegian Investment Fund Prefer American Companies over Europeans. The article continues below the illustration.
The chasm in work-life balance between the U.S. and European countries is wide. The European Union, for example, has a mandated four-week paid vacation period across all 27 of its countries. Some countries also require additional paid days off on top of that required period. Meanwhile, in the U.S., nearly one-third of employees say they don’t have any access to paid time off (PTO), according to a 2023 report.
Norway’s wealth fund owns around 1.5 percent of all globally listed shares and has stakes in more than 9,200 firms.
Data suggests that Tangen is right, but only by a fine margin. According to the European Union, in 2022 the average workweek of people between the ages of 22 and 65 was 37.5 hours. The longest working weeks recorded were in Greece, 41 hours a week, and Poland, 40.4 hours. By contrast, the Netherlands had the shortest working week of 33.2 hours, followed by Germany at 35.3 hours.
U.S. shares make up almost half of all the fund’s equities portfolio. That’s up from 32% in 2013. The U.K., in contrast, accounted for 6% of its equities, down from 15% a decade ago. The malaise gripping European equities has been underlined by the shift in Norway’s investment priorities.
America’s performance, particularly in innovation, is “worrisome” in contrast to Europe, Tangen told the Financial Times.
CEO of Norwegian Investment Fund Prefers American Companies over Europeans, compiled by Tor Kjolberg.
Feature image (on top): Nicolai Tangen, CEO of Norges Bank Investment Management. Photo © Norges Bank.