World’s top wealth fund puts billions in UK despite Brexit

Norwegian wealth fund CEO Yngve Slyngstad speaks at a news conference in Oslo. Reuters

The world’s largest sovereign wealth fund said on Wednesday that it would increase its exposure to British companies, property and bonds regardless of the outcome of Brexit negotiations.

In an unexpected move, Norway’s $1 trillion wealth fund announced it would increase its exposure to British companies, reversing a trend that saw top financial firms moving chunks of their business to other European cities to protect operations after March 29.

Britain is the third largest market for the fund’s investment capital, which was built up from Norway’s oil and gas revenues.

Yngve Slyngstad, the chief executive, said “we will continue to be significant investors in Britain. We foresee that over time our investments in the UK will increase.”

“We foresee that over time that our investments in the UK will increase,” he added.

Last year, 8.5 per cent of the fund was invested in Britain in the form of equities, bonds and real estate.

While the fund's British investments have declined in value over the past 12 months, Mr Slyngstad said that “with our time horizon, which is 30 years plus, current political discussions do not change our view of the situation.”

The fund is one of the biggest foreign investors in Britain, a co-owner of London's Regent Street, a top five owner in firms such as HSBC and BP and a holder of roughly $8 billion of UK government debt.

Mr Slyngstad said that the fund had almost 250 staff in London and would stay at that level regardless of the outcome of the Brexit talks, which see British Prime Minister Theresa May still struggling to secure parliamentary majority for a deal.

Mr Slyngstad said that, whatever the outcome, the fund would not budge. “We see no operational consequences of any possible outcomes,” he said.

The move comes as Deutsche Bank, Goldman Sachs, Citi and others move parts of their business out of the United Kingdom.