Norway’s $1.4 trillion sovereign wealth fund is closing its only office in China, it said on September 7, though it will continue to invest in the country.
The fund, which is one of the world’s biggest investors, is among a number of financial firms reviewing their presence in China due to the tightening of regulatory oversight, which is affecting the political ties between Beijing and the West. In April, Canada’s third-largest pension fund, Ontario Teachers’ Pension Plan closed its Hong Kong-based China equity investment team earlier this year. One of the world’s largest pension funds, it would no longer have country-focused stock-picking teams based in Asia.
As of the end of 2022, Norges Bank Investment Management (NBIM), which operates the Norwegian fund, owned shares worth about $42 billion in about 850 Chinese companies. These investments will now be managed from the firm’s Asia hub in Singapore. The decision to close its Shanghai office was driven by “operational considerations” and does not affect the fund’s investments or its investment strategy in China, NBIM said in a statement.
NBIM set up its Shanghai office in November 2007, a year after the Chinese regulator granted the Norwegian sovereign wealth fund a license to trade directly in mainland China’s stock exchanges. It was the firm’s first Asian office. It opened another office in Singapore in 2010.