When it comes to Elon Musk, controversy seems to follow him everywhere. But did you know one of Europe’s biggest pension funds, ABP, quietly sold off its entire stake in Tesla? And no, it wasn’t because of Musk’s polarizing politics or his social media antics.
Let’s dive into the story behind this surprising decision.
Timing Matters: A Big Move Before Big News
ABP, the Netherlands’ massive public-sector pension fund managing a whopping €533 billion, decided to part ways with Tesla stock during a portfolio review. This happened before Musk made headlines with his outspoken political endorsements and social media rants about European affairs.
The decision to sell wasn’t about Musk’s controversial tweets or his public endorsement of Germany’s far-right party. ABP confirmed the move was purely strategic, completed by the end of September—a full month before Musk stirred the pot online.
Missed Gains but No Regrets
Here’s where it gets interesting: Tesla’s stock skyrocketed just two months after ABP sold its shares. While that may sting, ABP is playing the long game. Their focus is on steady, diversified returns across a wide range of investments—not betting big on any one company.
In fact, Tesla was just a small slice of their U.S. holdings. Compare their €571 million stake in Tesla to the €6 billion invested in giants like Microsoft or Apple, and it’s clear Tesla wasn’t the cornerstone of their strategy.
Musk’s Pay Deal: A Tough Pill to Swallow
One issue ABP couldn’t ignore? Musk’s jaw-dropping pay package, valued at over $110 billion. Dubbed the largest in human history, it’s a sore spot for investors, especially in Europe, where sky-high executive pay often raises eyebrows. ABP took a strong stance against Tesla’s decision to re-run a shareholder vote on the pay deal last year.
This controversial package, now tangled in legal battles, was one of several factors influencing ABP’s decision. However, the fund insists it wasn’t the sole reason for the sell-off. Their investment strategy takes into account a range of risks, including market conditions beyond any CEO’s control.
A Bigger Picture
ABP’s move wasn’t just about Musk or Tesla. The pension fund holds investments across multiple asset classes, from tech heavyweights like Nvidia to corporate bonds and real estate. For ABP, the key is balance and minimizing risk for the millions of Dutch citizens who rely on them for their retirement.
As ABP sees it, the world doesn’t revolve around one electric car company—no matter how flashy or controversial its CEO might be.
Musk’s Take? Radio Silence
Tesla didn’t respond to requests for comment, and Musk himself hasn’t addressed ABP’s divestment. But if history is any indicator, he’s not one to take investor departures lightly. Remember his feud with Bill Gates over shorting Tesla? Or his fiery comments about George Soros after the billionaire investor sold off his Tesla shares? It seems Musk has a long memory when it comes to perceived slights.
The Final Word
ABP’s decision to part ways with Tesla is a reminder that even the most innovative companies aren’t immune to tough calls by major investors. For Europe’s largest pension fund, it’s all about securing stable, long-term returns—not riding the highs and lows of one CEO’s rollercoaster journey.
What’s your take? Should pension funds play it safe, or is there room for bold bets like Tesla? Let us know your thoughts!
