Norway’s $1.4 trillion sovereign wealth fund has started winding down its office in Shanghai as Singapore takes over as its hub in Asia.
(Bloomberg) — Norway’s $1.4 trillion sovereign wealth fund has started winding down its office in Shanghai as Singapore takes over as its hub in Asia.
The fund is initiating the process to close its representative office in the city due to “operational considerations,” Norges Bank Investment Management said on Thursday. The move doesn’t affect the investment strategy in China, it said.
That mirrors a shift among other international investors, with banks including Goldman Sachs Group Inc. and Morgan Stanley scaling back ambitious expansion plans in China amid a deteriorating geopolitical climate. Goldman Sachs recently revised projections on its five-year plan and has let go more than a 10th of its workforce on the mainland after doubling headcount to over 600.
The Ontario Teachers’ Pension Plan announced earlier this year it was shutting an Asia equity investment team in Hong Kong, cutting five jobs, while Moody’s Corp. shuttered the China operations of its risk management division, laying off about 100 people, people familiar said in November last year. Moody’s Analytics closed its offices in Beijing, Shanghai and Shenzhen following discussions about operating efficiency and profitability, the people said.
The retreats reflect the growing ambivalence over doing business in the world’s second largest economy after years of regulatory crackdowns, China’s inspections on foreign companies, and concerns about the growth prospects of the economy.
“We will ensure that the closing process is conducted in an orderly manner for all affected persons,” the fund said, adding that there are currently 8 people in the Shanghai office.
Norway’s wealth fund opened its Singapore office more than a decade ago and has 45 members of staff located there handling all operational functions for the Asian region, including China, it said. As of the end of 2022, the fund owned about 850 companies in its $42 billion China portfolio.
Created in the 1990s to invest Norway’s oil and gas revenues abroad, the fund — also known as Norges Bank Investment Management — is the world’s biggest single owner of equities. Shanghai was one of four cities outside Oslo where the fund has offices. It also has real estate offices in Luxembourg, Paris and Tokyo.
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–With assistance from Lulu Yilun Chen.
(Updates with other financial institutions moves starting in third paragraph.)
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