Pressure grows on Norway's new wealth fund chief

Reporting by Terje Solsvik - 14 Aug 2020

Pressure grows on Norway's new wealth fund chief to divest hedge fund stake

OSLO (Reuters) - The businessman appointed to lead Norway’s $1.1 trillion (839.4 billion pounds) sovereign fund should not be allowed to take up the job unless he divests his holdings in a hedge fund, the opposition Labour Party told daily VG and broadcaster NRK on Friday.FILE PHOTO: Nicolai Tangen speaks during a press conference on his employment contract as he has been appointed new general manager of Norges Bank Investment Management May 28, 2020. NTB Scanpix/Hakon Mosvold Larsen

Norges Bank in March announced that Nicolai Tangen would take over the running of Norway’s rainy-day assets from September, while putting his own 43% stake in London-based AKO Capital into a blind trust. Tangen has ruled out selling his AKO stake.

“We’ve concluded that the risks of conflict of interest are too great to be compatible with taking up that position,” Labour leader Jonas Gahr Stoere told NRK.

Labour is the largest opposition party in Norway and the narrow favourite to win elections next year.

The central bank was not immediately available for comment.

The appointment was the subject of a contentious hearing in parliament on Monday, in which Norges Bank’s supervisory council, a watchdog appointed by parliament, sharply criticised the appointment, while central bank Governor Oeystein Olsen defended it.

Labour’s criticism puts significant pressure on the centre-right minority government, although its formal powers to directly intervene in the hiring process are limited.

Julie Brodtkorb, who heads the council overseeing the central bank, on Monday told parliament that there had been “a breach of guidelines, regulations and laws” during the hiring process.

Norges Bank has admitted to being too slow in releasing Tangen’s name as part of a public list of applicants for the job to head Norges Bank Investment Management (NBIM), which is mandated by law.

Defending the appointment however, Olsen said Tangen is now only a passive investor in AKO and that any potential conflicts of interest had been “eliminated for all practical purposes”.

The sovereign wealth fund, the world’s largest, owns about 1.5% of all listed global equities and is worth three times Norway’s annual gross domestic product, making its investment returns vital to the country’s public finances.

Tangen’s surprise appointment thrust the 54-year-old, whose private wealth is estimated at more than $500 million, into the limelight in Norway.

Reporting by Terje Solsvik, editing by Gwladys Fouche and Steve Orlofsky

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