NBIM Acquires Stakes in Offshore Wind Farms

Norges Bank Investment Management, the manager of Norway’s $1.75 trillion sovereign wealth fund, announced Monday that it has entered into an agreement to acquire a 49% stake in two European offshore wind projects from German energy company RWE A.G.

NBIM’s ownership interest in the two wind projects, named Thor and Nordseecluster, is worth 1.4 billion euros ($1.51 billion). The projects are located in Denmark and Germany, respectively.

NBIM expects the cost to acquire and fund the construction of the two wind farms to be approximately 4 billion euros. The projects are expected to be completed between 2027 and 2029. The agreement is expected to be completed by the beginning of the third quarter of 2025.

The fund allocates 0.1%—about $2.4 billion—to a renewable energy infrastructure portfolio, which includes a handful of direct investments in wind and solar projects across Europe. The fund allocates 71.4% of its assets to equities, 26.6% to fixed income and 1.8% to real estate.

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The unlisted renewable infrastructure portfolio, created in 2021, lost 9.81% in 2024, which the fund attributed to a higher cost of capital. The portfolio posted returns of 4.15%, 5.12% and 3.68% in 2021, 2022 and 2023, respectively.

The fund, which invests Norway’s oil revenue, returned 13.09% in 2024.

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Tags: Infrastructure, NBIM, Norges Bank Investment Management

The tech-fueled equity rally of 2023 and 2024 hit a roadblock in the first quarter of 2025, as weak economic data and uncertainty about tariffs and economic policy caused uncertainty in the economy, among investors and for companies’ earnings.

In the first quarter of 2025, the S&P 500 Index fell 4.6% and is now trading at levels similar to July 2024. In comparison, the iShares MSCI China Index rose 15.68% in the first quarter, and the MSCI Europe Index was up 10.60%.

According to Bank of America’s March global fund manager survey, investors dumped U.S. equities in favor of European ones, with the bank seeing its biggest recorded drop in U.S. equity allocations.

“The allocation to eurozone stocks is the highest since July ’21, allocation to staples is the highest in 18 months while respondents suggest their lowest tech allocation in 2 years,” wrote Candace Browning, Bank of America’s head of global research, in a report.

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The same survey found that 69% of institutional investors think the theme of U.S. exceptionalism has peaked, reflected by large outflows from U.S. equities. Strategists from Bank of America only anticipate the S&P 500 rising from current levels in the second quarter if there is a reversal of inflation and an easing of trade war concerns.

President Donald Trump is expected to announce reciprocal tariffs on April 2, and investors are waiting to see just how broad the tariffs will be. Trump has previously announced an additional 25% tariff on car imports and has proposed secondary tariffs on countries trading oil with Venezuela and Russia.

In Europe, defense stocks have been winners this year, as EU countries plan to significantly increase spending on defense. For example, shares of German defense contractor Rheinmetall A.G. were up more than 130% in the first quarter. The EU’s ReArm 2030 initiative will see member nations invest 800 billion euros ($863.9 billion) in defense over the next several years.

“European equities saw a significant outperformance thanks to a huge fiscal regime shift towards higher defense spending,” wrote Jim Reid, a multi-asset research strategist at Deutsche Bank, in an April 1 note to clients. “In fact, Q1 marked the biggest quarterly performance gap between the STOXX 600 and the S&P 500 in a decade.”

In China, the equity rally this year has largely been driven by tech and artificial intelligence companies. Chinese companies like DeepSeek and Tencent have released AI models that go head-to-head with models from OpenAI and other U.S. AI companies.

Investors began to question the need for enormous capital spending on AI following the January release of DeepSeek’s R1 model, which was allegedly developed with fewer resources than most other AI models, while performing comparably well.

Investing in Chinese companies could be challenging for U.S.-based investors, as Trump signed an executive order in February intended, among other things, to make it harder for Chinese and U.S. entities to invest in each other. The order’s provisions direct the U.S. government to consider restricting listed Chinese companies, which could force institutional investors to reduce their investments in China.