This content is from: Corner Office

Norges Bank Reveals Plans to Solve CEO Debacle

The $1.1 trillion sovereign wealth fund has announced how its new CEO, Nicolai Tangen, will be kept separate from the personal wealth he generated at AKO Capital.

After a contentious two months, hedge fund founder Nicolai Tangen has signed an employment contract with the Norges Bank Investment Board that aims to ensure distance between his personal assets and his work at the sovereign wealth fund.  

Norges Bank, which manages 11.5 trillion kroner (US$1.1 trillion), announced in late March that it had hired Tangen to replace Yngve Slyngstad as its chief executive officer. In October Slyngstad announced his intention to step down after 12 years in the role.   

But soon after the bank announced Tangen's appointment, a Norwegian news site, VG, raised questions about the circumstances of his hiring and the separation between his personal assets and the public fund. Since then, Norges Bank and its supervisory council have been working to manage the fallout from those questions.   

Norges Bank’s executive board met Wednesday to discuss Tangen’s employment, and on Thursday shared the details of how his relationship with the $18.1 billion hedge fund firm he founded, AKO Capital, will change.  

According to the announcement, Tangen’s voting right in AKO Capital has been reduced to 43 percent. A trustee will vote on his behalf. Tangen’s profit share in AKO will also be reduced: from 66 percent to 46 percent.   

All dividends that arise from Tangen’s ownership will be donated to the AKO Foundation, the Thursday announcement showed. Tangen will step down from all of his directorships in AKO companies, and the composition of those boards has changed so that their members don’t have close ties to Tangen. For six months after leaving his role at the sovereign wealth fund, Tangen cannot provide services to or take director’s seats in the AKO system, the announcement said.  

Norwegian asset manager Gabler Investments will manage Tangen’s personal wealth on his behalf, and a proxy will handle any back-and-forth between the firm and Tangen. According to the announcement, “this means that Tangen will not know what he is invested in, and it ensures that unwanted information is not received by Tangen.” 

“Mechanisms are established which ensure that Tangen will have no influence on his fund investments for as long as he is employed by Norges Bank, and which prevent possible conflicts of interest and impartiality,” said Norges Bank governor Øystein Olsen in a statement Thursday. 

Tangen will start working as CEO on September 1, the announcement said.  

[II Deep Dive: The Hedge Fund Manager Tapped to Lead Norway’s Sovereign Wealth Fund

Tangen founded AKO Capital, an $18.1 billion hedge fund based in London, in 2005, according to the firm’s website. Questions arose following the late-March announcement that he had been hired at the sovereign wealth fund not only about how he’d keep his personal interests separate, but also about an incident that took place in the fall of 2019.  

In November of that year, after Slyngstad announced he was leaving the fund, he attended a Back to University seminar in Pennsylvania that Tangen also attended.  

Instead of taking a flight paid for by the sovereign wealth fund, Slyngstad took a chartered flight back to Oslo from Pennsylvania with other conference attendees, per Norges Bank. VG reported that the flight had been paid for by Tangen. 

In December, Norges Bank’s search consultant, Russell Reynolds, started a “broad search in Norway and internationally” to find candidates for the CEO role. Tangen was among those candidates, according to an April statement from Norges Bank.   

Tangen sent an email to Slyngstad in January requesting details on the job, but he never received a response, the statement said. On January 20, a long list of 41 names, including Tangen’s, was shared with the board, per the statement.   

However, in February, the board published a shortlist of eight candidates: Tangen’s name was not on it. According to the April statement, Russell Reynolds was continuing to consider other candidates, including Tangen. Tangen was interviewed twice and was eventually hired for the role.  

Related Content