Nicolai Tangen rode a controversial electric scooter into his first day of work as chief of Norway’s Oil Fund on Tuesday. The formerly London-based billionaire hedge fund manager was, however, equipped with both an obligatory helmet and a traditional backpack, perhaps in an effort to fit into Norwegian work culture and avoid further controversy.
That proved unavoidable after Norwegian Broadcasting (NRK) had already reported that his revised job contract, in which he’s supposed to have sold off all holdings in his hugely lucrative fund AKO Capital, still wasn’t ready when he took over his new job on September 1. He claims he’s nonetheless committed to turning over his life’s work to the charitable AKO Foundation, and after many stormy months of drama surround his employment, he’s giving up billions in order to take on the top Oil Fund job.
“He must have really wanted this job,” marvelled political commentator Kjetil B Alstadheim in newspaper Aftenposten. It’s not often that people actually pay to take on a new top job, on the contrary, but in this case Tangen is not only giving up much of his own fortune, he’ll also face huge new taxes by moving his fortune home to Norway: NOK 15 million every year, reported newspaper Aftenposten last week.
That’s because in order to meet political expectations in Norway, Tangen must divest his holdings in AKO Capital and sell off around NOK 5 billion worth of assets in order to meet the Oil Fund’s ethical guidelines for employees. The proceeds of Tangen’s huge sell-off will be moved into simple bank accounts, the balances of which are taxed at full value under Norway’s formueskatt (literally, fortune tax, levied on net worth at the end of the tax year).
With interest rates at zero in Norway and very low elsewhere in the world, Tangen won’t earn much if anything on all those bank deposits, and instead pay hefty tax on them, year after year.
All for a ‘dream job’
He’ll earn NOK 6.65 million in his new job as chief executive of Norges Bank Investment Management (NBIM), the unit of Norway’s central bank that manages one of the world’s largest sovereign wealth funds popularly known as the Oil Fund. It’s literally been fueled by Norway’s offshore oil revenues since 1996, and running it clearly appealed to Tangen.
“It’s difficult to accuse him of taking the job out of mercantile interests,” Pål Ringholm, chief analyst at Sparebank1 Markets, told Aftenposten and its associated business service E24. “There must be something else that’s driving him.”
The 54-year-old native of Kristiansand on Norway’s southern coast has simply said, repeatedly, that after building up his own fortune, he viewed the job of running Norway’s fortunes as the most exciting next step for him. He called it a “dream job,” and when the central bank board narrowed down all its candidates and decided he was most qualified, he simply grabbed it, at huge personal cost.
‘Very generous person’
Friends describe him as a very generous person, even though that can get him into trouble. Tangen himself has said he doesn’t measure his life with money. “I think I just get lots of joy out of giving money to good causes,” he told Aftenposten/E24. He already had NOK 2 billion in banks when he suddenly found himself needing to sell off the assets worth the other NOK 5 billion. That means NOK 7 billion will be spread around banks worldwide, with only a fraction of it insured in the event of bank failures.
Newspaper Dagens Næringsliv (DN) has reported that Tangen can make a comeback on the board of the AKO Foundation he set up long before the Oil Fund job came around, when his terms at NBIM are up. In the meantime, he claims he’s looking forward to getting to know all his new Oil Fund colleagues. He’s already been spending time at NBIM’s offices both in Oslo and London.
“Nicolai Tangen has been acquainting himself with the organization, also through meetings in Oslo and London,” Marthe Skaar, spokesperson for NBIM, told DN. She said that up until now, Tangen has been treated as an “external guest” and always been escorted by an NBIM official.The meetings haven’t involved investment strategies or details of various investments that aren’t already publicly released.
Tangen was also involved in the recruitment of a “personal assistant,” but beyond that, he hasn’t been involved in interviews when NBIM has needed to hire other new colleagues. His personal assistant was recruited internally and was also starting on September 1.
Made a ‘very positive impression’
Tangen has also, not surprisingly, met the man who’s been NBIM’s acting chief executive, Trond Grande, who also had been considered a top candidate for the job. Grande graciously spoke highly of Tangen, telling DN that “I’ve had two one-to-one meetings with Nicolai Tangen and have a very positive impression of him.” Grande claimed he and other Oil Fund colleagues “looked forwad to get a new leader” after their former boss, Yngve Slyngstad, had to resign after two terms in the job.
“I think he’s a very smart, competent and likeable guy,” Grande said of his new boss. Others have called Tangen “an idealist, very proper and prepared.” In addition to being a wildly successful hedge fund manager and billionare, Tangen is also an art collector who made waves in his hometown with a new art museum project, a philanthropist who can cook, and a life-long student whose old friends claim is simply “screwed together differently” than most others.
“Nicolai has worked in international finance for many years,” one of those friends, state attorney general Fredrik Sejerstad, told DN. “He’s lived a different type of life than what we’re used to.” That may mean he’ll make a difference at the Oil Fund, too.