While not all the bad news has been priced in yet, “we for sure have taken some pretty big write-downs on property portfolios, so there’s already quite a bit of damage in there”, Mr Tangen said. The fund’s investments in logistics properties “continue to perform really well”.

After the fund took a hit on the collapse of SVB Financial Group’s Silicon Valley Bank, Mr Tangen told legislators in April that he was focused on minimising exposure to so-called rotten apples. Part of that work has touched on property stocks, he said on Wednesday.

“We are continuously trying to find them and earlier in the year we were out of the Adani Group in India,” he said, adding that the fund had “been out of a big Swedish property management company which went bad”.

Mr Tangen was speaking about troubled landlord SBB, formally known as Samhallsbyggnadsbolaget i Norden AB, according to the fund.

Sweden’s commercial landlords are particularly under pressure from higher borrowing costs that hurt their ability to service debts after years of leveraged growth. That has led to credit rating downgrades and pushed companies into talks with bondholders on easing terms, as well as property divestments and other ways of raising cash.

The fund was invested in 21 Swedish real estate firms at the end of 2022 – the most recent available data. It had cut the stake in SBB during 2022 to 0.07 per cent from 1.52 per cent, finishing the year with $US2 million in that stock.

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. While stocks make up 70 per cent of its portfolio, it also invests in property, renewable energy infrastructure and bonds. It discloses a list of individual holdings once a year.

Bloomberg

Bloomberg