Tariff War Draws Investment Warning From $160 Billion Novo Fund
April 28, 2025
(Bloomberg) — The $160 billion fund behind Ozempic-maker Novo Nordisk A/S (NVO) says President Donald Trump’s tariff war has created so much economic uncertainty that it now sees little likelihood it will move ahead with any big investments.
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“Until there is more clarity on the prospects for economic growth, we will slow down our investment activities,” Kasim Kutay, chief executive officer of Novo Holdings, said in an interview. “We’re in the midst of uncharted waters.”
Since launching his trade war on April 2, Trump has subjected markets to a constant stream of headlines that have left investors lurching from deep selloffs to sudden rebounds. The long-term fallout, however, looks set to leave a significant dent in the global economy. Bloomberg Economics estimates the tariff war could wipe about $2 trillion off the world’s economic output by the end of 2027.
Novo Holdings, whose investments comprise life sciences and other ventures identified as having sustainable goals, had been intending to exit “some assets,” Kutay said. But those plans will now probably need to be postponed to later in the year or even into 2026, he said.
“I mean, who’s going to IPO an asset in this environment? Unless you have to, it’s probably not advisable,” Kutay said. “The view on interest rates, which is a key barometer and a driver of how and when to invest, is all over the place.”
The pullback follows a record year for Novo Holdings, which allocates funds on behalf of the Novo Nordisk Foundation. Last year, its investment portfolio generated a return of 18%. In addition, the investor manages the foundation’s holdings in Novo Nordisk. (It owns just over 28% of the drugmaker’s capital and a little more than 77% of its voting rights.)
After soaring well over 200% between the end of 2020 and the end of 2023, Novo Nordisk saw its value slide 11% in 2024. The company’s weight-loss treatments increasingly face challenges from competitors including Eli Lilly & Co. (LLY), while US efforts to rework drug pricing models are also weighing on the company’s share price.
Though a number of Trump’s policies are at odds with many of the values held at Novo Holdings, Kutay says the investor isn’t planning to pull investments from America. That’s despite the US government’s campaign of attacks against investment strategies that target environmental, social and governance goals.
“We’ve been investing on ESG terms when very few people had heard of ESG,” Kutay said. At the same time, the US “remains a very, very important market for all of our investments,” he said. Novo “can’t avoid the US and we don’t want to avoid the US.”
When markets settle down enough for Novo Holdings to move ahead with its investment plans, it will look into defense and nuclear power, Kutay said. He’s been given a mandate to invest in nuclear fusion even if that means accepting below-market returns for a period, because the purpose would be “to make a meaningful societal impact,” he said.
As the technology stands today, “we’re at least 10 to 15 years away from potentially realizing returns,” Kutay said. Innovations including in nuclear fusion are needed if the planet’s warming is to be stopped, but the current focus is too often on renewable energy when other technologies “can arguably more efficiently deal with climate change,” he said.
As an investment goal, “nuclear is very high up on that list,” Kutay said.
Other investors in Novo’s home market are drawing similar conclusions. The Danish fund 92 Capital said on Monday that it’s seeking to raise €350 million ($397 million) as it bets on a nuclear power revival.
For now, Novo Holdings is “waiting to see how the dust settles,” he said. And then “we’ll reengage again and hope to be able to actually make investments at more attractive valuations and take advantage of some of the dislocation.”
(Adds reference to 92 Capital in penultimate paragraph.)
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