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Europe is less hard-working, less ambitious, more regulated and more risk-averse than the US, according to the head of the giant Norwegian oil fund, and the gap between the two continents is widening.
Nicolai Tangen, chief executive of the $1.6 trillion fund, told the Financial Times it was “concerning” that American companies were outpacing their European rivals in innovation and technology, leading to huge outperformance of U.S. stocks over the last decade have led.
“There is a problem with the mindset around accepting failure and risk. If you go broke in America, you get another chance. “In Europe you are dead,” he said, adding that there were also differences in “general levels of ambition.” We are not very ambitious. I should be careful when I talk about work-life balance, but Americans just work harder.”
His views are significant because the oil fund is one of the largest individual investors in the world, owning an average of 1.5 percent of all listed companies worldwide and 2.5 percent of all European stocks.
Its US holdings have increased over the last decade while its European holdings have declined. U.S. stocks account for nearly half of all stocks, up from 32 percent in 2013. The leading European country – the United Kingdom – made up 15 percent of its stock portfolio a decade ago, but just 6 percent last year.
Asked whether people at the oil fund were worried about the outcome of this year’s U.S. presidential election, in which Donald Trump is seeking to oust incumbent Joe Biden, Tangen replied: “Yes.”
He added: “But I probably shouldn’t say too much about that. In America, we simply invest in great companies for the long term. It will have no impact on how we allocate our capital. We have almost half the assets in America; We will remain invested in America.”
The fund is invested in about 9,000 companies worldwide, but seven U.S. technology companies – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – make up about 12 percent of its stock portfolio.
Tangen said there is “an argument that the big ones are getting bigger.” [and] Winner takes all,” as developments like artificial intelligence took hold. He added that in recent conversations with U.S. business leaders they had complained that it was difficult to do business in Europe because of the strict regulations and red tape.
“I’m not saying it’s good, but in America there is a lot of AI and no regulation, in Europe there is no AI and a lot of regulation. It’s interesting,” he added.
The Norwegian fund has taken an increasingly active stance in support of environmental, social and governance (ESG) issues, voting against many of its largest holdings, including Big Tech groups, at annual meetings last year.
Tangen said he was concerned that the fund could potentially get caught up in the current ESG backlash in the U.S., which has led BlackRock, the world’s largest asset manager, to more than triple its security spending for Chief Executive Larry Fink.
“You have to be very careful. You have to pick your battles. Some things make you want to be less vocal about it,” he said, adding that the fund has enshrined all of its positions in extensive position papers and expectations documents on issues such as pay and women on boards.
He said the oil fund would become “the only company left with a voice here” as U.S. investors face skeptical clients and political pressure, while “we have a client who is very socially conscious.”