Stockholm (NordSIP) – Following the October resignation of Yngve Slyngstad as CEO of Norges Bank Investment Management (NBIM), the asset manager of Norway’s sovereign wealth fund, the Norwegian central bank spent five months looking for his replacement. When Nicolai Tangen, CEO of UK-based hedge fund AKO Capital was announced as Slyngstad’s successor, it seemed like a smooth transition was in the works. However, the last five months have seen scandals and inquiries into the hiring decision stain the reputation of Norway. The latest testimony before Norway’s Parliamentary Finance Committee this week did not resolve this issue.
Old Boys Club?
The problems started shortly after the hiring announcement when the FT reported that Slyngstad had recently attended an elite event organised by Tangen at his old Alma Mater, the Wharton School at the University of Philadelphia. The report stated that the three-day event included sessions with which Jamie Oliver, Olympic sailor Annie Lush and psychotherapist Esther Perel and was described as a luxury trip by opposition MP Hadia Tajik. Slyngstad was not the only attendee from the top of Norway’s elite. Torbjorn Roe Isaksen, then trade-minister, and Fredrik Sejersted, the country’s attorney-general, also attended the event. Sejersted attended Norway’s elite cold-war era Armed Forces’ Russian course, which trained many of today’s top Norwegian politicians and businessmen, including Tangen, a personal friend.
Asides from the general appearance of opacity created by the event and its attendants, two specific problems came up. First, it arose that Slyngstad flew back to Oslo on a private flight paid for by Tangen. The same report from the FT also noted that Tangen reached out to the outgoing CEO to arrange a conversation about what the position entailed. Acknowledgements of errors and misjudgement have not failed to restore credibility to the hiring process.
Addressing Conflicts of Interest?
In a letter sent to Norges Bank’s Supervisory Board at the end of July, the Executive Committee clarified the arrangements that had been made to avoid conflicts of interest between Tangen’s vast personal holdings and his upcoming responsibilities at NBIM. It noted that the “appointment of Gabler as a discretionary active portfolio manager, with lawyer Haakon Blaauw as an intermediary, will mean that Nicolai Tangen’s personal investments in funds are managed independently of Nicolai Tangen.”
“Furthermore, Nicolai Tangen’s direct and indirect ownership interests in the management company AKO Capital LLP will be merged into the company DSHN Philanthropy LLP, and reduced to less than 50 per cent. Nicolai Tangen’s voting rights in DSHN will be exercised by lawyer Erik Keiserud, who has been appointed as an independent steward with full authority and duty to exercise Nicolai Tangen’s ownership on his behalf,” the letter added.
“The Executive Board’s view is that the risk that Nicolai Tangen’s ownership interests will conflict with the interests he will safeguard as head of NBIM for all practical purposes has been eliminated,” the letter concluded.
Finance Committee Hearing
In the most recent development of the Tangen saga, on August 10th, Øystein Olsen, governor of the Norwegian central bank and chairman of NBIM, testified before Norway’s Parliamentary Finance Committee that all was in order regarding the hiring of Tangen.
“In its review of Nicolai Tangen’s business dispositions, Norges Bank has not found any circumstances that are contrary to the principles in NBIM’s expectations document,” Olsen said. “In a thorough process to find a new leader of NBIM, Nicolai Tangen emerged as by far the strongest candidate. With his background and expertise, we are confident that he will make an important contribution to safeguarding the fund’s purpose of the highest possible return in the long term,” he added.
“Nothing has emerged in recent months that has changed our assessment”, Olsen said before expressing his full confidence in Tangen’s ability to carry out his responsibilities. “I understand that Nicolai Tangen’s background and ownership interests have created public attention. We acknowledge that the process surrounding the hiring of Tangen has raised questions that have needed to be clarified, and – there have been some learning points.”
However, although it appears that his clarifications about Tangen and AKO Capital’s taxation arrangements were satisfactory, the Committee’s chair, Conservative MP Julie Brodtkorb, was not fully satisfied with the transparency of the hiring process. She argued that the failure to include Tangen’s name on the official applicant list was a potential breach of public information law. She also noted that the failure to inform the finance minister that Tangen would be allowed to keep a stake in his company, despite ministerial concerns about conflicts of interest, also constituted a potential violation.
The Committee is due to make a recommendation on the matter by August 21st.
Image © Storting