OSLO (Reuters) — Norway’s $2 trillion sovereign wealth fund will next week announce changes to the handling of its Israeli investments, Finance Minister Jens Stoltenberg said on Friday, ruling out any blanket withdrawal over the war in Gaza.
The government on Tuesday said it had launched an urgent review of the fund’s investments over ethics concerns linked to the war in Gaza and the Israeli military rule of the West Bank.
“I see several measures over time, but what can be addressed quickly, must be done quickly,” Stoltenberg told a press conference after holding his second meeting with fund officials in three days.
He did not say what these measures could be, but added that there would not be a wholesale divestment from all Israeli companies. “If we did that, it would mean we are divesting from them because they are Israeli,” he said.
The review followed local news reports that the fund had built a stake in an Israeli jet engine group, Bet Shemesh Engines Ltd., which provides services to Israel’s armed forces, including the maintenance of fighter jets, creating a political debate in the Nordic country ahead of elections on September 8.
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On Wednesday, the fund’s ethics watchdog, which checks that the fund’s investments respect ethical guidelines set by parliament, acknowledged it should have considered Bet Shemesh Engines for possible divestment. Bet Shemesh did not reply to requests for comment.
Use of external managers under scrutiny
Stoltenberg said that one question being discussed between the finance ministry and the fund was its use of external portfolio managers for some of its holdings. He said Bet Shemesh had been handled by an external manager, which he did not name.
The fund said it uses three Israeli external fund managers for some of its holdings in the country.
The fund, which owns stakes in 8,700 companies worldwide, held shares in 65 Israeli companies at the end of 2024, valued at $1.95 billion, its records show.
It has sold its stakes in an Israeli energy company and a telecoms group in the last year, and its ethics watchdog has said it is reviewing whether to divest holdings in five banks.
Anti-Israel, pro-Palestinian campaigners have said this is not enough and have called for a country-wide divestment by the fund. Norway’s parliament in June rejected a proposal for the fund to divest from all companies with activities in the West Bank and Gaza.
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