Norway's Oil Fund Caught in Turkey's Stock Market Scandal, Israeli Investments Reviewed

Norway's Government Pension Fund Global, the world's largest sovereign wealth fund with nearly $2.4 trillion in assets, has been indirectly linked to a major stock market scandal in Turkey. While the fund's exposure to the affected Turkish companies represents a small fraction of its overall portfolio, the situation has raised reputational concerns. The scandal involves allegations of artificial inflation of stock prices in small, illiquid companies, leading to significant losses for investors when the market corrected sharply in September. Turkey's BIST 100 index fell 16.65% that month, its worst performance since 2008, with some stocks losing up to 90% of their value. Turkish regulators liquidated 131 investment funds linked to the alleged manipulation, affecting over 455,000 investors and an estimated $18-20 billion in assets.

The Norwegian fund, established in 1990 to manage oil and gas revenues, began investing in Turkey in the early 2000s. By late 2025, it had approximately $1.8 billion invested in Turkey, with about $600 million managed by a local firm, Istanbul Portfoy. However, Norway terminated its relationship with Istanbul Portfoy in November 2025, shortly after a company executive was fined by Turkish regulators for actions creating a misleading impression of stock prices. The fund's indirect connection to the current scandal emerged when it was revealed that the Norwegian fund held shares in some of the companies under investigation, including Tera Yatırım and Astor Enerji. The fund's investment strategy involves holding small stakes in thousands of companies globally, often acquired through index tracking, which can lead to holding shares in companies involved in such investigations without direct participation in alleged schemes.

Separately, the article details the Norwegian fund's significant investments in Israel, which began in 2004. By 2013, the fund held about 3.5 billion shekels in 62 Israeli companies. It has since become a major foreign institutional investor in Israel, with holdings across various sectors including banking, technology, and retail. The fund also applies ethical guidelines, having previously excluded Israeli companies involved in settlement construction. In 2024-2025, the fund intensified its review of Israeli investments and significantly restructured its portfolio, reducing its holdings to approximately $2 billion in 38 companies by August 2025, focusing only on companies within its benchmark index and ceasing the use of external managers for Israeli stocks.

While the Turkish situation involves alleged market manipulation and the Israeli context relates to ethical considerations and portfolio restructuring, both highlight the challenges for the massive Norwegian fund in managing its vast global portfolio. The Turkish scandal tests the fund's control systems in distinguishing market risk from potential financial crises, while the Israeli adjustments demonstrate its efforts to refine its investment strategy and oversight across diverse markets.