The executive board of Norway’s central bank surprised just about everyone on Thursday, when its members named the wealthy Norwegian founder of an investment firm in London as the new chief of the country’s huge sovereign wealth fund. Nicolai Tangen, who also has built up a major art collection in recent years, is trained as a chef as well.
Newspaper Dagens Næringsliv (DN) was quick to point out that Tangen is “literally willing to give away billions of kroner in order to be a state employee in Norway.” He’ll have to cut all ties to his highly profitable investment firm, AKO Capital in London, when he takes over running what’s best known as the Oil Fund.
Some top politicians were nonetheless concerned, with Greens leader Une Bastholm noting that running Norway’s Oil Fund “is something quite different than playing around with a hedge fund.” Tangen might disagree that he’s been “playing around” in London while building up AKO Capital over the past 15 years. Today it boasts arond 70 employees and manages the funds of unversities, charitable foundations and family fortunes. Since he also reportedly earning NOK 7.2 billion in the process, even Bastholm had to admit that “Tangen is clearly clever with money.”
That’s what prompted the bank board to announce that it “feels confident” that Tangen, born in 1966 just before Norway discovered oil on its continental shelf, was “the best candidate” to manage what’s officially called the Government Pension Fund Global. It ranks as one of the largest sovereign wealth funds in the world, is used to stash away Norway’s oil revenues for future generations but also is currently playing a key role in helping the country through the Corona virus crisis, which already has thrown around 300,000 Norwegians out of work and threatens to seriously damage the otherwise strong Norwegian economy.
It’s more important than ever that the fund, which has seen its value plunge 16 percent during the Corona chaos, has sound management. Some top politicians are also demanding a greener profile. “He’ll have to seriously join the discussion around Norway’s and the fund’s exposure to fossil energy and the climate risk we have,” Kari Elisabeth Kaski, finance policy spokesperson and a Member of Parliament for the Socialist Left party, told DN.
‘Delivered very good financial results’
The executive board of Norges Bank, which is responsible for the Oil Fund, noted that Tangen “has built up one of Europe’s leading investment firms and has delivered very good financial results as an international investment manager.” Bank board leader and central bank chief Øystein Olsen also cited Tangen’s “extensive experience with equity management, which is the fund’s largest asset class.”
He’ll take over as new chief executive of Norges Bank Investment Management (NBIM) in early September, armed in addition to his investment and entrepreneurial experience with a degree in finance from the prestigious Wharton business school at the University of Pennsylvania along with master’s degress in art history from Courtald Institute of Arts and in social psychology from the London School of Economics. He also studied Russian at the Norwegian Armed Forces School of Intelligence and Security.
The central bank was careful to note that Tangen will move back home to Norway from London, where he’s lived for the past 28 years. He’ll also “pay tax to Norway and have Oslo as his place of work,” NBIM stated.
Tangen himself claimed he’d landed “a dream job” and that it will be “with great humility and pride that I will continue and further develop the impressive work that (outgoing NBIM chief) Yngve Slyngstad and his team has carried out, with ensuring high return on the oil wealth of all Norwegians and being at the forefront of developing a responsible ownership and investment practice globally.”
He described himself as “a simple guy from Kristiansand” on Norway’s southern coast, where he’s recently been caught in political debate over his donation of an art collection as long as it would go on display in a converted grain silo on the waterfront next to the city’s cultural hall. The conversion project is expected to cost more than NOK 600 million, with local taxpayers picking up part of the cost along with the county, the state and Tangen himself.
Tangen was taken aback by all the controversy in his hometown. “I thought I was doing something nice,” he told Norwegian Broadcasting (NRK). “I never thought it would cause so much uproar.” It even upset the local election in Kristiansand last fall, when a right-wing party called Demokratene wound up as third-largest after attracting voters opposed to the silo art project.
The highly public debate involving Tangen didn’t seem to bother central bank chief Olsen, who told NRK that he thinks Tangen has “a good understanding of his role.” Tangen has also, according to Olsen, succeeded in creating a good “presentation culture” through “good reflection around how he, in dialog with our political authorities, board and not least in cooperation with NBIM’s competent colleagues, will organize and develop the fund.”
Olsen stated that Tangen had, “throughout the employment process, demonstrated a deep understanding of the challenges associated with managing Norges Bank Investment Management and of developments in the international capital market.”
Slyngstad, whom Tangen will replace, also had high praise for his successor. “Nicolai Tangen is unusually engaged, knowledgeable and an insightful investor,” Slyngstad told NRK. He’d met Tangen “many times” in professional situations, and Tangen has held speeches about fund management at conferences arranged by Norges Bank.
Tangen beat out Trond Grande, Slyngstad’s deputy leader at NBIM who had emerged as a top candidate when the central bank released it’s list of applicants late last month. Grande has worked as a risk specialist at NBIM since 2007, holds two degress in business and specialized in international leadership.
Now he’ll be reporting to Tangen, who also is a trained cook who thinks that managing investments has a lot in common with working in a kitchen. “You’re never better than your last pancake,” Tangen said.