Largest global investment entity anticipates increased unloading of Israeli shares influenced by events in Gaza and the West Bank
The Norwegian sovereign wealth fund, the world's largest with around $2 trillion in assets, has announced plans to divest from more Israeli companies due to the situation in Gaza and the West Bank. This move comes after the fund sold its stake in Bet Shemesh Engines Ltd (BSEL), a company that provides services to Israel's armed forces.
The decision to divest from Israeli companies is not new. Since mid-2025, the fund has divested from dozens of Israeli companies due to ethical concerns tied to the Gaza and West Bank situation. As of now, 17 companies have been publicly named, including Paz, Azorim, Delek Motors, and El Al. Six more companies have been divested but remain unidentified.
The fund's CEO, Nicolai Tangen, stated that the divestment was due to good returns in the stock market, particularly in the financial sector. However, he admitted that the fund should have had a tighter overview of its Israeli investments earlier.
The fund invests in a variety of assets, including bonds, real estate, renewable energy projects, and stocks. In recent days, it has divested stakes in 11 firms, including BSEL, but did not name the other companies. The fund has also terminated contracts with some external asset managers handling Israeli investments and has already divested parts of its portfolio in Israel due to the worsening humanitarian crisis in Gaza.
The profit from these investments was substantial, with the fund posting a 698 billion Norwegian crowns ($68.28 billion) profit for the first half of the year. Despite this, the fund's review, which began last week, was triggered by media reports of its stake in BSEL.
The fund began investing in BSEL in November 2023, about one month after the war in Gaza began. However, the fund declined to name the external portfolio manager through which it invested in BSEL. The fund also held quarterly meetings with Bet Shemesh Holdings, but the war in Gaza was not discussed.
BSEL was initially rated as a "medium-risk" stock by NBIM with regards to ethics concerns. However, a recent review classified it as a high-risk stock in May. Despite requests for comment, BSEL did not respond.
The Norwegian sovereign wealth fund is one of the world's largest investors, owning an average of 1.5% of all listed stocks worldwide. The fund's ethics council continues quarterly assessments of these holdings to enforce their ethical investment guidelines. The fund expects to divest from more companies in the future as it continues to review its investments in light of the ongoing situation in Gaza and the West Bank.
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