US owners take major stake in Volvo Group

American investment firm Capital Group has become AB Volvo's second largest shareholder with six percent of the Swedish truck manufacturer.

US owners take major stake in Volvo Group

The capital investment firm has built up its stake since last spring, spending 1.6 billion kronor ($220 million) to increase its capital holding from 4.9 percent to 6.6 percent. French firm Renault controls 21.8 percent of AB Volvo.

“They are a giant within capital investment, one of the biggest. They have acquired significant owner interests in other firms too. They have some ten percent stakes in other firms and now they hold six percent of AB Volvo. But for a big player it is a limited investment, it doesn’t make much of a splash,” said Mats Liss, a Swedbank share analyst, to news agency TT.

The firm underlined that this should not be seen as a power play from their side and more as an investment.

“We are long-term and invest in shares which we believe can develop well over a three-five year period,” said Simon Levell at Capital Group in London to the Dagens Industri newspaper.

Following a decline in AB Volvo’s share price last year by a half it has rebounded this year, up 36 percent to date. According to Mats Liss the purchase indicates that the trend is likely to continue.

“They have made that analysis and they usually do their homework thoroughly before making a move,” Mats Liss said.

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Norway’s wealth fund gains 38 billion euros in first quarter

Norway's sovereign wealth fund, the world's largest, gained some 38 billion euros (380 billion kroner) in the first quarter, boosted by stock market investments, it said Wednesday.

Norway's wealth fund gains 38 billion euros in first quarter
Norway's wealth fund, which has been built up since the 1990s from the state's oil revenues.Photo by Jan-Rune Smenes Reite from Pexels

The massive fund, which has been built up since the 1990s from the state’s oil revenues, was worth a total of 11 trillion Norwegian kroner (1.1 trillion euros) at the end of March.

In the first quarter, it posted a four percent return, driven by its equity investments, which account for 73.1 percent of its portfolio and rose by 6.6 percent.

“The rise of the equity market was to a great extent driven by the finance and energy sector,” Trond Grande, the fund’s second in command, said in a statement.

The fund also made gains on its real estate investments, which account for 2.5 percent of its assets and were up 1.4 percent, while its fixed-income investments (nearly a quarter of the portfolio) suffered a 3.2 percent loss.

At the same time, the government dipped into its piggy bank to the tune of 83 billion kroner to balance its budget.

Recently the fund made its first direct investment in renewable energy infrastructure.

READ MORE: Norway wealth fund buys first renewable energy stake 

It announced it was purchasing a 50 percent stake in the world’s second-largest offshore wind farm, the Borssele 1 & 2 wind farms located off the coast of the Netherlands in the North Sea.

The 50 percent stake is being acquired from Danish firm Orsted, which will continue to own the remaining 50 percent of the project.