Norway sovereign fund expects to sell more Israeli stocks over Gaza, West Bank

FE Team | Published: August 12, 2025 23:01:42

ARENDAL, Norway, Aug 12 (Reuters): Norway's $2 trillion wealth fund, the world's largest, said on Tuesday it expects to divest from more Israeli companies as part of its ongoing review of investments in the country over the situation in Gaza and the West Bank.
The fund announced on Monday it was terminating contracts with all three of its external asset managers who handled some of its Israeli investments and has divested parts of its portfolio in the country over the worsening humanitarian crisis in Gaza.
The review began last week following media reports that the fund had built a stake of just over 2 per cent in an Israeli jet engine group that provides services to Israel's armed forces, including the maintenance of fighter jets.
The stake in the company, Bet Shemesh Engines Ltd (BSEL), has now been sold, the fund announced on Tuesday. Bet Shemesh did not respond to requests for comment.
Norges Bank Investment Management (NBIM), an arm of Norway's central bank, which held stakes in 61 Israeli companies as of June 30, in recent days divested stakes in 11 firms, including BSEL. It did not name the other companies.
The fund is now taking a closer look at the remaining 50 Israeli companies in the portfolio and will report back to the finance ministry by an August 20 deadline.
"There is good reason to believe that there will be further sell-outs," Deputy CEO Trond Grande told Reuters, without saying how many companies could be affected.
The government has repeatedly ruled out divesting from Israel as a whole on the grounds it would mean the fund was divesting from these companies for being Israeli.
The fund began investing in BSEL in November 2023, about one month after the war in Gaza began, via an external investment manager, Tangen said during a press conference earlier. The fund declined to name the external portfolio manager.
Since then, NBIM has held quarterly meetings with Bet Shemesh Holdings, but the war in Gaza was not raised as a theme.
"We had discussions about their business in the United States, not about the war in Gaza," Tangen said, adding that the fund had rated BSEL as a "medium risk" stock with regards to ethics concerns.
BSEL was later reviewed as a high-risk stock in May. That change should have been quicker, Tangen said, adding that NBIM should have had a tighter overview of these investments earlier.
Norway faces a general election on September 8 and multiple politicians have called on Tangen to resign in light of the Israeli investments.
He ruled out stepping down, saying he had carried out the fund's mandate, as decided by parliament.
"I haven't even thought about it," he said in an interview. "We (at the fund) have not made any kind of formal mistakes. We have ended up in a situation that has been unfortunate, but we are executing on the mandate."
The fund, which invests the Norwegian state's revenues from oil and gas production, owns on average 1.5 per cent of all listed stocks worldwide. It also invests in bonds, real estate and renewable energy projects.