The protesters outside Norway’s central bank last month were blunt: the world’s largest sovereign wealth fund should sell out of Israel. Norway’s $1.7tn oil fund was holding a conference with some of the world’s most prominent asset managers on how to be a better investor. “Stop investing in companies that contribute to genocide and occupation,” suggested one protester.
Norway has the biggest sovereign wealth fund — and, unlike many other countries with similar investment vehicles, it is also a democracy. The debate on Israel is perhaps the most acute demonstration of the pressures this can bring.
The giant Norwegian fund — which on average owns 1.5 per cent of every listed company worldwide — has largely avoided big geopolitical problems over its 28-year existence. But there are rising concerns within the fund and linked bureaucracy that it could become ensnared by a bitter conflict such as that between Israel and Palestine or even a political backlash in the US.