The Week in Breakingviews: When fund managers fret

Apollo Global Management

14/08/2026 16:10

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Peter Thal Larsen
LONDON, Aug 15 (Reuters Breakingviews) - Welcome back! It’s been another steamy week in London. On Thursday the British capital was warmer than Singapore. I’m escaping for the next fortnight, leaving you in the capable hands of my colleague Liam Proud. Don’t email me, as I’m unlikely to reply. If this newsletter was forwarded to you, sign up here to get it in your inbox every weekend.
OPENING LINE
“Nvidia boss Jensen Huang is like a car salesman hawking a popular model. He sees eager customers for computing power, but knows that fewer of them can afford it.”
Read more: Jensen Huang takes wheel of $500 bln AI bandwagon.
FIVE THINGS I LEARNED FROM BREAKINGVIEWS THIS WEEK
China collected just 20% of GDP in tax last year, compared with 34% in the OECD. (The taxman cometh)

        Swiss bank UBS UBSG.S trades at its highest multiple of book value since 2010. (The exuberance is rational)
      

        Lending against stocks, bonds and other investments is the fastest-growing category of U.S. bank loans. (Risks are building up)
      

        Most of Tata Group’s listed units outperformed India’s Nifty 50 Index under departing Chair N. Chandrasekaran. (Another succession mess)

        Former Chinese Premier Zhu Rongji, who has died at 97, once quipped that he had prepared 99 coffins for his foes and one for himself. (China misses his reform zeal)
NORSE FOR CONCERN
You might expect most money managers to be skipping to work these days. As stock markets across the developed world hit new all-time highs, the business of looking after other people’s wealth is buoyant. Yet spend any time with senior executives at large pension and sovereign wealth funds, and the mood is a mix of incredulity and foreboding. Much of what their funds own is expensive by historical standards. And a correction looks overdue.
Most of the time, these seasoned investment professionals keep their opinions to themselves, or couch them in technocratic jargon. Occasionally, though, someone speaks up. That’s what Nicolai Tangen, the CEO of Norway’s sovereign wealth fund, did this week. In a striking speech, he asked his audience to consider the possibility that the $2 trillion fund could disappear: “The answer to that question is ‘yes’ – and the worst part is that in the world we live in today, it is fairly likely,” he declared.
To be clear, Tangen was not actually predicting the imminent incineration of the world’s largest sovereign wealth fund, which was set up three decades ago to manage the country’s oil wealth. On Wednesday it reported a healthy 9.4% return for the first half of 2026. His real message was that Norwegians should prepare themselves for the possibility that the vehicle which finances about a quarter of the government budget could hit leaner times. At the same time, he spelled out just how extraordinary its performance has been. In 2010, its managers projected equities would appreciate by 7% a year. In reality, the stock portfolio has returned twice that figure in local currency terms. The overall fund has more than doubled in value in the last four years. The factors behind this achievement? “Largely luck.”
Tangen is vague on what might cause a serious reversal. He describes a bursting of the artificial intelligence bubble and a simultaneous trade war between the United States and China causing a balance sheet crisis similar to the Great Depression of the early 1930s. His intended audience doubtless included the politicians who keep a close eye on the fund’s objectives. For example, the mandate to invest 70% of its assets in equities is set by Norway’s Ministry of Finance; any substantial changes must be endorsed by the country’s parliament.
Nevertheless, the sentiments Tangen expressed are not that different from the private discussions taking place in many large investment institutions. They are also at odds with the exuberance displayed by many retail investors at the moment (see Shopping for Stocks). Much depends on who turns out to be right.
CHART OF THE WEEK
While baby boomers and members of Generation X obsess about house prices, younger investors are increasingly fixated on identifying the next hot tech stock. A recent McKinsey Global Institute report explains why: equities account for most of the increase in household wealth over the past decade. Jon Sindreu argues that prioritising financial portfolios over bricks and mortar may bring long-term benefits.
PARTING SHOT
Airlines have long been the bane of the investment world. Legendary stockpicker Warren Buffett once quipped that a far-sighted capitalist would have done his successors a big favour by shooting down aircraft pioneer Orville Wright’s first flight at Kitty Hawk. Yet buyout groups like Apollo Global Management are sniffing out value hidden in beaten-down carriers like easyJet, which previously traded at a big discount to the value of its assets. Airline loyalty schemes and maintenance units offer other opportunities to gain investment altitude. Oliver Taslic picks out some potential targets.
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(Editing by Liam Proud; Production by Oliver Taslic)
((For previous columns by the author, Reuters customers can click on LARSEN/peter.thal.larsen@thomsonreuters.com))