The world’s biggest sovereign wealth fund faces serious questions over the conduct of its outgoing chief executive and the selection process of his successor amid a scandal involving a luxury jet and a private performance by Sting.
CEO Yngve Slyngstad has had to explain why he accepted a flight paid for by Nicolai Tangen, the hedge-fund manager who was eventually tapped to succeed him. The development has now prompted Norwegian authorities to look into convening an emergency meeting to examine more closely the circumstances under which Mr Tangen was selected.
The watchdog of Norway’s central bank, which oversees the US$1 trillion fund, will try to find out whether the events “represent a breach of regulations applying to Norges Bank’s activities,” the head of the Supervisory Council, Julie Brodtkorb, said in a text message on Monday.
The revelations have stunned Norwegians and created the appearance of scandal around one of the country’s most revered institutions. Mr Tangen’s appointment had already raised questions. To some, his jet-set lifestyle seemed at odds with the spirit of a fund created to safeguard the savings of an entire nation.
Mr Tangen is currently due to take over as CEO in September. Mr Slyngstad announced last October he intended to step down after leading the fund for 12 years, during which time he generated record returns.
At the centre of the affair is a closed conference paid for by Mr Tangen that took place in the US in November. Besides Mr Slyngstad, the event was attended by several other top-ranking Norwegian public figures. Mr Tangen’s subsequent appointment as CEO of Norway’s wealth fund was a surprise when it was announced last month, because he never appeared on any official list of candidates. He says he was first contacted by a head-hunting firm in December 2019.
Norges Bank says Mr Slyngstad wasn’t involved in the recruitment process. Mr Tangen has since told newspaper VG that he planned the seminar back in 2018, before it was known that Mr Slyngstad’s job would be up for grabs.
Mr Tangen, the founder of a US$16 billion investment firm called AKO Capital LLP whose funds are registered in the Cayman Islands, contacted Mr Slyngstad by email in January to ask about the job, Dagens Naeringsliv said on Monday. In the email, he referred to their meeting in November, the newspaper said. Mr Slyngstad never replied.
Mr Slyngstad was invited to the event in an official capacity as a speaker, said Oystein Olsen, the governor of the central bank.
“Slyngstad points out that he should have taken scheduled flights home covered by Norges Bank,” Mr Olsen said in an email. “Norges Bank will now review the journey to ensure that it is dealt with in accordance with the bank’s ethical rules.”
Norges Bank covered the cost of Mr Slyngstad’s flight to New York and his train ticket to Pennsylvania to attend the conference at the Wharton Business School. Mr Slyngstad then flew back on the plane chartered by Mr Tangen “due to practical considerations,” according to Norges Bank Investment Management, the unit that manages the fund.
The event included a private performance by Sting, at a cost of US$1 million, which was also paid for by Mr Tangen, according to VG.
Another passenger on the flight paid for by Mr Tangen was his long-time friend, Attorney General Fredrik Sejersted. The office of Prime Minister Erna Solberg said on Sunday that Mr Sejersted would no longer be called on to advise in matters concerning Mr Tangen, given the ties between the two. Minister of Labour and Social Affairs Torbjorn Roe Isaksen, then in charge of trade and industry, also participated in the event, though the government paid for his travel and accommodation.
For Mr Slyngstad, such events are normal and part of the job of the CEO of the wealth fund, it said.
“Slyngstad has wide-ranging contact with other funds and investors,” the fund said. “Nicolai Tangen is, as the head of AKO Capital, one of the people with whom it is natural for Slyngstad to be in contact with. The contact between Tangen and Slyngstad has been based on their professional roles as leaders of their respective organisations.”