Norway’s $2 trillion sovereign wealth fund will stay invested in Israel, NBIM deputy CEO says

When asked about Norway’s sovereign wealth fund winding down its investments in Israeli companies, Trond Grande, deputy CEO of Norges Bank Investment Management (NBIM), said the fund would continue to be invested in Israel.

NBIM manages the fund on behalf of the Norwegian population.

“In this benchmark — this is kind of anchored all the way up to Parliament here in Norway — Israel is part of our benchmark,” he told CNBC’s “Squawk Box Europe” on Tuesday. “So that’s a sign that we are [still going] to be invested there.”

On Monday, NBIM announced that, amid the ongoing conflict in Gaza, it was “simplifying” its investments in Israel. That would involve selling all holdings of Israeli companies that aren’t in its equity benchmark index “as soon as possible,” and terminating contracts with external asset managers in Israel to bring all remaining investments in the country in house. The move came after a request from the Norwegian Finance Ministry that NBIM review its management mandate and its investments in Israeli firms.

At the end of June, the fund was invested in 61 Israeli companies, 11 of which were not in the Finance Ministry’s equity benchmark index.

“Due to the conflict and due to opinion here in Norway, I should say there’s a lot of scrutiny around specifically our holdings in Israeli companies, and that has come under increased scrutiny over summer and into the last week,” Grande told CNBC.

“What we’re doing now is really not down-weighing, I wouldn’t put it like that, but we are trying to simplify our portfolio in Israeli equities, because we have ethical guidelines as well. What’s key to us is that we’re not invested in companies that could be in some way, shape or form, contributing to violating the ethical guidelines that we have.”