Nicolai Tangen, the CEO of Norges Bank Investment Management, believes that Americans put in more effort and work harder compared to their European counterparts.
According to Norway’s ‘trillion-dollar-man’, America’s approach to failure is playing a crucial role in driving the country ahead of its European counterparts. While workers in Europe may enjoy a better work-life balance, they are not as driven and ambitious as their American counterparts.
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Under the leadership of Tangen since 2020, the $1.6 trillion fund has increasingly directed its investments towards the United States rather than its neighboring countries in Europe. This strategic shift in investment focus is not a mere coincidence.
According to Tangen, America’s performance in terms of innovation and productivity is “worrisome” when compared to Europe (Financial Times).
In addition, it’s worth noting that in the U.K., employees are legally entitled to 28 days of paid leave per year if they work full-time. On the other hand, the U.S. does not have any legal requirement for employers to provide paid time off to their staff. Nevertheless, according to the Bureau of Labor Statistics, the average employee in their first year of service takes an average of eight days of paid time off.
Tangen has expressed his admiration for the work ethic of U.S. staffers, but he disagrees with the excessive pay packages given to executives. In a previous interview with Fortune, he stated that CEOs who earn more than $20 million annually are “enriching themselves on our behalf.”
“It feels like they’re stealing from us in broad daylight,” he added.
Norges Bank has embraced the investment strategy that aligns with the prevailing trend in the United States. This is not surprising considering that America is the birthplace of the Magnificent 7 stocks, which have played a pivotal role in driving the stock market’s growth and are expected to maintain their dominance, as suggested by analysts.
The support of a prestigious institution like Norges Bank Investment Management will undoubtedly inspire other investors to join the cause. Norges Bank Investment Management holds an esteemed position in the financial world, being the largest single owner of global stock markets. With its control over 1.5% of shares in listed companies worldwide, it is undoubtedly one of the most influential players in the field.
The organization also possesses extensive high-end properties, including a significant share of London’s Regent Street, as well as a substantial ownership of office spaces in New York’s Times Square and Washington’s Pennsylvania Avenue.
Over the past decade, Norges Bank has significantly increased its investments in the U.S., with the country now accounting for 46.9% of its portfolio. This marks a considerable rise from just under 30% a decade ago and a significant jump from 26.3% in 2003.
In contrast, Norges Bank’s portfolio in Europe decreased from 59.5% in 2003 to 28.7% in 2023.
The election issue
Naturally, like numerous American investors, Tangen is closely monitoring the 2024 presidential elections, which have the potential to disrupt the investment landscape.
The CEO, who earns less than $1 million a year as a public servant, acknowledged that there were individuals within the organization who expressed concerns about the upcoming race. However, he refrained from divulging too much information, stating, “I probably shouldn’t say too much about that.” He emphasized that the company’s focus remains on investing in exceptional American businesses for the long haul. The CEO assured that the race would not impact the allocation of their capital, as they already have a significant portion of their assets invested in America and are committed to continuing this trajectory.
According to the Financial Times, Norges Bank holds 12% of its equity holdings in the Magnificent 7. Tangen suggests that there is a case for the larger companies growing even more and dominating the market.
All the Magnificent 7 businesses have one common thread, which is currently the favorite phrase of Wall Street: artificial intelligence.
Tangen highlighted that Europe is creating unnecessary challenges for itself in this aspect. According to him, tech CEOs are feeling frustrated due to the excessive bureaucratic regulations in Europe, especially when compared to the United States.
The leaders in AI in the United States, including Sam Altman from OpenAI and Tesla CEO Elon Musk, are acknowledging the need for guardrails in this rapidly advancing technology.
“It’s interesting how in America, there is a plethora of AI without much regulation, while in Europe, there is an abundance of regulation but a lack of AI,” Tangen remarked.
