1
00:00:02,360 --> 00:00:06,319
Speaker 1: Bloomberg Audio Studios, podcasts, radio.

2
00:00:06,320 --> 00:00:07,440
Speaker 2: News, and Place to Say.

3
00:00:07,440 --> 00:00:10,200
Speaker 3: The Norse Bank Investment Management CEO Nikolay tank and joins

4
00:00:10,240 --> 00:00:12,440
Speaker 3: us now for more. Nicolay, welcome back to the program.

5
00:00:12,480 --> 00:00:15,640
Speaker 3: So a lot has changed since we last spoke. Attitudes

6
00:00:15,680 --> 00:00:18,200
Speaker 3: towards US assets are starting to shift. I just wonder

7
00:00:18,239 --> 00:00:20,480
Speaker 3: how you and the team have started to think about that,

8
00:00:20,520 --> 00:00:23,320
Speaker 3: how you're debating that issue internally over in Norway.

9
00:00:24,840 --> 00:00:27,120
Speaker 2: Well, we have a very long term view on what

10
00:00:27,160 --> 00:00:27,480
Speaker 2: we do.

11
00:00:27,640 --> 00:00:31,120
Speaker 4: So you know, we are invested with roughly half the

12
00:00:31,200 --> 00:00:33,560
Speaker 4: fund in the US and we are here for the

13
00:00:33,640 --> 00:00:36,680
Speaker 4: very long term, so we have not made any major

14
00:00:36,720 --> 00:00:37,920
Speaker 4: adjustments lately.

15
00:00:39,000 --> 00:00:41,000
Speaker 3: So Nikolai, can I rid into that that you view

16
00:00:41,040 --> 00:00:42,800
Speaker 3: this as just a shock to the cycle and maybe

17
00:00:42,800 --> 00:00:45,320
Speaker 3: not a long term shock to the system.

18
00:00:45,760 --> 00:00:47,360
Speaker 4: Well, I think it's very very difficult to say it,

19
00:00:47,360 --> 00:00:50,120
Speaker 4: because when we make scenario analysis here, one of the

20
00:00:50,159 --> 00:00:53,360
Speaker 4: negative things that we see is that if you get

21
00:00:53,600 --> 00:00:58,240
Speaker 4: a disentanglement between the two major training blocks, that's really

22
00:00:58,280 --> 00:00:59,960
Speaker 4: really negative because it's slowed down.

23
00:01:00,360 --> 00:01:02,880
Speaker 2: Slows down growth, increases inflation and zone.

24
00:01:02,920 --> 00:01:05,440
Speaker 4: So it is potentially one of the really negative things

25
00:01:06,280 --> 00:01:08,280
Speaker 4: that can happen here. So I think the out look

26
00:01:08,319 --> 00:01:11,680
Speaker 4: for markets are very very uncertain, given.

27
00:01:11,440 --> 00:01:14,760
Speaker 1: That there has been a shift Nikolay to move at

28
00:01:14,840 --> 00:01:18,480
Speaker 1: least a little bit of assets about large acid allocators

29
00:01:18,520 --> 00:01:21,280
Speaker 1: out of the United States diversified to places like China,

30
00:01:21,400 --> 00:01:24,680
Speaker 1: to India to Europe. Why aren't you doing the same

31
00:01:24,840 --> 00:01:27,880
Speaker 1: and shifting to benchmarks that have a little bit more

32
00:01:27,880 --> 00:01:28,880
Speaker 1: exposure elsewhere.

33
00:01:30,200 --> 00:01:35,640
Speaker 4: Well, we actually are extremely well diversified already. You know,

34
00:01:35,680 --> 00:01:37,920
Speaker 4: we own one and a half percent of all the

35
00:01:37,959 --> 00:01:40,679
Speaker 4: listed equities in the world. In Europe we have more,

36
00:01:40,720 --> 00:01:43,840
Speaker 4: we have closed to three percent, and so in the

37
00:01:43,959 --> 00:01:46,640
Speaker 4: US we have one than a half percent, and we

38
00:01:46,680 --> 00:01:48,840
Speaker 4: also have the same in the rest of the world.

39
00:01:48,880 --> 00:01:50,960
Speaker 4: So I would say we are we are well diversified,

40
00:01:50,960 --> 00:01:53,960
Speaker 4: seventy percent equities, thirty percent bonds, and we also have

41
00:01:54,000 --> 00:01:56,600
Speaker 4: a very very good, really say portfolio which is coming

42
00:01:56,600 --> 00:01:57,559
Speaker 4: in really handy here.

43
00:01:58,640 --> 00:02:01,640
Speaker 1: Well, Nikola, you said previously this morning when you were

44
00:02:01,680 --> 00:02:05,200
Speaker 1: speaking to media and Oslo, that you will correct the

45
00:02:05,400 --> 00:02:08,639
Speaker 1: underweight to US stocks. So you are planning to reinvest

46
00:02:08,639 --> 00:02:11,280
Speaker 1: in US stocks even though you are surprised that we

47
00:02:11,360 --> 00:02:14,960
Speaker 1: haven't seen even more weakness. Why are you redeploying all

48
00:02:15,000 --> 00:02:18,720
Speaker 1: of the money that maybe has lost in terms of

49
00:02:18,720 --> 00:02:23,000
Speaker 1: benchmark allocation to US equities given some of these larger uncertainties.

50
00:02:24,160 --> 00:02:27,920
Speaker 4: Well, the kind of the increased medication to the US

51
00:02:28,000 --> 00:02:30,320
Speaker 4: is part of a program that we've been doing for

52
00:02:30,440 --> 00:02:31,119
Speaker 4: quite some time.

53
00:02:32,040 --> 00:02:34,720
Speaker 2: We still have some work to do here and that

54
00:02:34,760 --> 00:02:35,720
Speaker 2: we will continue to do.

55
00:02:36,200 --> 00:02:39,639
Speaker 4: And you know, we think the larger American companies are

56
00:02:39,760 --> 00:02:42,320
Speaker 4: just great long term investments, and so we are very

57
00:02:42,320 --> 00:02:43,440
Speaker 4: happy to be invested there.

58
00:02:44,600 --> 00:02:46,320
Speaker 5: What sectors can you give us a little bit of

59
00:02:46,320 --> 00:02:49,240
Speaker 5: a hint of specifically the sectors or the companies are

60
00:02:49,280 --> 00:02:50,760
Speaker 5: interested in the United States.

61
00:02:52,080 --> 00:02:54,720
Speaker 4: Well, we are quite index near in how we are

62
00:02:54,720 --> 00:02:57,720
Speaker 4: invested in the US. So we typically have large holdings

63
00:02:57,760 --> 00:03:00,320
Speaker 4: in the you know, in the big tech companies and

64
00:03:00,720 --> 00:03:02,320
Speaker 4: in all your large companies.

65
00:03:01,919 --> 00:03:05,560
Speaker 2: Really and we made you know, a lot of money

66
00:03:05,560 --> 00:03:06,720
Speaker 2: there over the last few years.

67
00:03:07,080 --> 00:03:09,880
Speaker 4: Of course, so far this year it's been it's been negative.

68
00:03:09,880 --> 00:03:11,760
Speaker 4: But when you look in comparison to the games we've

69
00:03:11,800 --> 00:03:15,280
Speaker 4: had the last year and the year before, we're.

70
00:03:15,160 --> 00:03:18,360
Speaker 2: Given back in a way surprisingly little.

71
00:03:18,400 --> 00:03:22,519
Speaker 5: I would say, what about defensive companies like Lockheed Martin,

72
00:03:22,760 --> 00:03:24,680
Speaker 5: is that going to be open for business? When it

73
00:03:24,680 --> 00:03:25,799
Speaker 5: comes to the cumber Well.

74
00:03:25,720 --> 00:03:31,720
Speaker 4: Fund, Well, we invest in a lot of different industries.

75
00:03:31,760 --> 00:03:36,440
Speaker 4: We have less exposure to the defense industry, but we

76
00:03:36,480 --> 00:03:38,640
Speaker 4: are in a lot of the defensing names as.

77
00:03:38,560 --> 00:03:41,960
Speaker 3: Well, Nikolai, one word you often use with us is

78
00:03:41,960 --> 00:03:44,320
Speaker 3: we are diversified. I just wonder if the meaning of

79
00:03:44,320 --> 00:03:47,520
Speaker 3: that word has shifted over time, particularly this year, the

80
00:03:47,560 --> 00:03:50,520
Speaker 3: treasury market is behaving in unpredictable ways. When the equity

81
00:03:50,560 --> 00:03:53,160
Speaker 3: market is falling, treasury markets have fall as well. In fact,

82
00:03:53,200 --> 00:03:54,720
Speaker 3: those two asset classes are training in.

83
00:03:54,760 --> 00:03:55,760
Speaker 2: Lockstep at the moment.

84
00:03:56,040 --> 00:03:59,240
Speaker 3: It's as if investors are treating all do dollargent on

85
00:03:59,360 --> 00:04:02,440
Speaker 3: its it as it's as one bucket. And I just wondered, Nicolay,

86
00:04:02,520 --> 00:04:04,960
Speaker 3: what that means for how you think about diversification this

87
00:04:05,080 --> 00:04:05,760
Speaker 3: year and beyond.

88
00:04:07,200 --> 00:04:10,360
Speaker 4: Yeah, there was sometimes when when this type of diversification

89
00:04:10,440 --> 00:04:13,560
Speaker 4: worked less well. We had the same type of situation,

90
00:04:14,480 --> 00:04:18,240
Speaker 4: you know, two three years ago, and so some years

91
00:04:18,279 --> 00:04:20,200
Speaker 4: it works, some years it doesn't. I think over time,

92
00:04:20,240 --> 00:04:22,919
Speaker 4: if you have a really long term time horizon, I

93
00:04:22,920 --> 00:04:25,240
Speaker 4: think it's the right positioning to have.

94
00:04:26,600 --> 00:04:28,840
Speaker 3: We've seen over the last month or so that some

95
00:04:28,920 --> 00:04:31,520
Speaker 3: investors were trying to understand whether what was happening in

96
00:04:31,560 --> 00:04:35,800
Speaker 3: the treasury market was just trades unwinding, some hedgephones, hedgephondes

97
00:04:35,839 --> 00:04:38,720
Speaker 3: blowing up, or Nicolay, whether it was a reassessment of

98
00:04:38,760 --> 00:04:41,640
Speaker 3: the safe haven status of the United States. Nicola I

99
00:04:41,720 --> 00:04:44,520
Speaker 3: was on your dashboard to have distinguished between one and

100
00:04:44,560 --> 00:04:44,920
Speaker 3: the other.

101
00:04:45,080 --> 00:04:46,400
Speaker 2: What do you think it was? What do you think

102
00:04:46,400 --> 00:04:46,720
Speaker 2: it is?

103
00:04:47,960 --> 00:04:49,960
Speaker 4: Well, I think it's a very very complicated question. I

104
00:04:49,960 --> 00:04:52,200
Speaker 4: don't think it's only one thing. I think it's a

105
00:04:52,240 --> 00:04:54,200
Speaker 4: cocktail of all the kind of things you.

106
00:04:55,880 --> 00:04:56,320
Speaker 2: Mentioned.

107
00:04:57,600 --> 00:05:00,960
Speaker 4: Now, so far this year, we've we have been neutral

108
00:05:01,560 --> 00:05:04,360
Speaker 4: to the US treasure market. We have not reduced or

109
00:05:04,400 --> 00:05:08,280
Speaker 4: increased positions, so we have certainly not to cause that move.

110
00:05:09,520 --> 00:05:11,960
Speaker 1: Do you have a sense, Nikolai, going forward of whether

111
00:05:12,040 --> 00:05:16,120
Speaker 1: we are entering a more inflationary period given some of

112
00:05:16,160 --> 00:05:19,560
Speaker 1: the deglobalization that we're seeing, some of the fissures and

113
00:05:19,640 --> 00:05:21,719
Speaker 1: some of the kinks that are emerging in the supply

114
00:05:21,839 --> 00:05:23,400
Speaker 1: chain system.

115
00:05:23,920 --> 00:05:26,880
Speaker 4: Yeah, I think we are potentially going into a more

116
00:05:26,880 --> 00:05:33,040
Speaker 4: inflationary situation. It is kind of a pretty obvious consequence

117
00:05:33,200 --> 00:05:39,400
Speaker 4: of higher tariffs, and of course inflation is really negative

118
00:05:39,400 --> 00:05:41,640
Speaker 4: of market, so I think that's potentially one of the

119
00:05:41,680 --> 00:05:44,240
Speaker 4: big risks that we are seeing. Just Now, interestingly, we

120
00:05:44,400 --> 00:05:47,919
Speaker 4: just yesterday released a podcast with Ken Rogoff, kind of

121
00:05:47,920 --> 00:05:52,479
Speaker 4: the world leading specialist I guess on inflation, and he's

122
00:05:53,080 --> 00:05:55,480
Speaker 4: also very worried about this particular fact.

123
00:05:56,480 --> 00:05:58,400
Speaker 1: Well, I guess just to build and what John was

124
00:05:58,440 --> 00:06:01,320
Speaker 1: asking about the idea of diverse vacation and you have

125
00:06:01,400 --> 00:06:04,080
Speaker 1: been about neutral on US bonds. There has been a

126
00:06:04,120 --> 00:06:08,560
Speaker 1: feeling that maybe diversification, especially in an inflationary environment, requires

127
00:06:08,560 --> 00:06:12,719
Speaker 1: some gold, requires some alternative assets that might be act

128
00:06:12,760 --> 00:06:17,200
Speaker 1: based funding, that have different streams of diversified revenues. Is

129
00:06:17,240 --> 00:06:19,039
Speaker 1: that your take on it that you just on the

130
00:06:19,080 --> 00:06:21,320
Speaker 1: margins want to pick up a little bit more gold

131
00:06:21,440 --> 00:06:23,640
Speaker 1: or diversify a little bit more in some of these

132
00:06:23,640 --> 00:06:24,640
Speaker 1: other asset classes.

133
00:06:25,920 --> 00:06:28,360
Speaker 4: Yeah, So we have a very strang mannight here from

134
00:06:28,400 --> 00:06:31,840
Speaker 4: the ministry, So we cannot buy gold, and I do

135
00:06:31,920 --> 00:06:34,880
Speaker 4: think gold sometimes has a bit difficult to understand what

136
00:06:34,920 --> 00:06:40,080
Speaker 4: the intrinsic value is of gold. We also don't do cryptocurrencies,

137
00:06:40,080 --> 00:06:42,440
Speaker 4: for instance, but when we look at alternative asseids, I

138
00:06:42,480 --> 00:06:45,360
Speaker 4: would say in a market like this, to have real estates,

139
00:06:45,440 --> 00:06:48,599
Speaker 4: that's very good. We have just under a thousand properties

140
00:06:48,720 --> 00:06:52,279
Speaker 4: around the world, you know, large holdings in Manhattan, Boston,

141
00:06:52,640 --> 00:06:55,040
Speaker 4: Washington and so on, and so I think that's going

142
00:06:55,080 --> 00:06:56,799
Speaker 4: to be a pretty good place to be going forward.

143
00:06:58,080 --> 00:06:58,400
Speaker 2: Nikola.

144
00:06:58,440 --> 00:07:00,719
Speaker 3: I appreciate your take at a difficult time. Thanks for

145
00:07:00,720 --> 00:07:03,520
Speaker 3: your time this morning, Nikolay Tangen there the Norway Wealth

146
00:07:03,560 --> 00:07:04,240
Speaker 3: fun CEO