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Europe is much less hard-working, much less bold, extra regulated and extra risk-averse than the US, in line with the boss of Norway’s big oil fund, with the hole between the 2 continents solely getting wider.
Nicolai Tangen, chief govt of the $1.6tn fund, informed the Financial Times it was “worrisome” that American firms had been outpacing their European rivals on innovation and know-how, resulting in huge outperformance of US shares previously decade.
“There’s a mindset issue in terms of acceptance of mistakes and risks. You go bust in America, you get another chance. In Europe, you’re dead,” he mentioned, including that there was additionally a distinction in “the general level of ambition. We are not very ambitious. I should be careful about talking about work-life balance, but the Americans just work harder.”
His views are vital because the oil fund is likely one of the largest single buyers on the earth, proudly owning on common 1.5 per cent of each listed firm globally and a couple of.5 per cent of each European fairness.
Its US holdings have elevated previously decade whereas its European ones have declined. US shares account for nearly half of all its equities in contrast with 32 per cent in 2013. The main European nation — the UK — represented 15 per cent of its fairness portfolio a decade in the past however simply 6 per cent final yr.
Asked if folks on the oil fund had been involved concerning the final result of this yr’s US presidential elections, the place Donald Trump is searching for to oust incumbent Joe Biden, Tangen replied: “Yes.”
He added: “But I probably shouldn’t say too much about that. We just invest in America in great companies for the long term. It won’t have any implications for how we allocate our capital. We have nearly half the assets in America; we will stay invested in America.”
The fund is invested in about 9,000 firms worldwide, however seven US know-how firms — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — account for about 12 per cent of its fairness portfolio.
Tangen mentioned there was “an argument for the big getting bigger [and] the winner taking it all” as developments corresponding to synthetic intelligence took maintain. He added that in latest discussions with US chief executives, that they had complained concerning the issue of doing enterprise in Europe due to robust rules and purple tape.
“I’m not saying it’s good but in America you have a lot of AI and no regulation, in Europe you have no AI and a lot of regulation. It’s interesting,” he added.
The Norwegian fund has taken an more and more lively stance supporting environmental, social and governance (ESG) points, voting towards lots of its largest holdings at annual conferences together with Big Tech teams final yr.
Tangen mentioned he was fearful concerning the potential for the fund to be caught within the present ESG backlash within the US, which has led to BlackRock, the world’s largest asset supervisor, greater than tripling its spending on safety for chief govt Larry Fink.
“You need to be very careful. You need to pick your fights. You want to be less vocal on some things,” he mentioned, including that the fund anchored all its stances in intensive place papers and expectation paperwork on subjects corresponding to pay and girls on boards.
He mentioned the oil fund was turning into “the only company left having an opinion here” as US buyers confronted sceptical purchasers and political stress whereas “we have a client that is very socially conscious”.
https://www.ft.com/content/58fe78bb-1077-4d32-b048-7d69f9d18809
