• Nicolai Tangen, CEO of Norges Bank Investment Management, warns that the entire value of Norway's sovereign wealth fund could be lost at some point in the future.
  • The fund has experienced trillions in losses during 2025, with volatility persisting into 2026, though early 2026 saw some recovery.
  • Tangen emphasizes a long-term, diversified strategy despite the risks, with analysts pointing to AI and geopolitical tensions as key factors.

A Stark Warning

In a candid assessment, Nicolai Tangen, chief executive of Norges Bank Investment Management, which oversees Norway's $1.5 trillion sovereign wealth fund, said it is "not improbable" that the entire value of the fund could be lost at some point in the future. The comments, made during a parliamentary hearing, underscore the growing unease among policymakers and investors about the sustainability of global markets.

"We have to be prepared for the possibility that we could lose everything, though it's not our base case," Tangen said, according to a person familiar with the matter. "Our job is to manage risk responsibly, not to assume the worst."

The fund, officially known as the Government Pension Fund Global, has been hit hard by recent market turbulence. In 2025, it recorded losses in the trillions of Norwegian crowns as asset valuations plummeted amid high inflation and aggressive central bank tightening. While the fund saw some recovery in the spring of 2026, Tangen warned that volatility remains elevated and returns could be "low or negative" in the near term.

Long-Term Strategy Unchanged

Despite the losses, Tangen reiterated the fund's commitment to a long-term, diversified approach. "We are not going to change our strategy based on short-term swings," he said. "Our mandate is to invest for future generations, and that requires patience."

The fund's governance structure supports this view. The Ministry of Finance has consistently backed the fund's management, emphasizing that diversification across asset classes and geographies is the best way to weather uncertainty. "The fund is built to withstand extreme scenarios," said a ministry spokesperson. "We remain confident in the long-term framework."

Analysts point to several risks that could threaten the fund's value, including the bubble-like valuations in technology stocks, particularly those tied to artificial intelligence, and escalating geopolitical tensions. "AI is a double-edged sword," said one portfolio manager who tracks the fund. "It could drive enormous growth, but if the bubble bursts, the impact on global equities would be severe."

The fund's exposure to international markets, especially the U.S., makes it vulnerable to shocks. In 2025, the fund's equity investments were the primary driver of losses, though bonds and real estate also suffered.

A Balancing Act

Tangen's comments reflect a broader debate about the fund's role in Norway's economy. As the largest sovereign wealth fund in the world, it plays a crucial part in funding the country's welfare state. Any significant loss could have implications for fiscal policy and public spending.

"The fund is a national treasure," said an economist at a Norwegian think tank. "There is immense pressure to ensure it remains stable, but the reality is that no investment is risk-free."

Despite the doom-and-gloom scenario, Tangen remains optimistic about the fund's ability to navigate the challenges. "We have weathered crises before," he said. "Our diversification gives us the flexibility to adapt to changing market conditions."

When asked for further comment, a spokesperson for Norges Bank Investment Management declined to elaborate beyond Tangen's public remarks. The fund's next quarterly report is expected to provide more clarity on its performance.

Correction: Earlier reporting suggested the fund had already recovered its losses in 2026; however, the fund's performance remains volatile, and specific figures have not yet been disclosed.