Nicolai Tangen – Overseeing the Largest Sovereign Wealth Fund (EP.354)
Dec 4, 2023
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Nicolai Tangen, CEO of the largest sovereign wealth fund in the world, discusses his investment path, serving as a universal owner of assets, and goals as leader of the organization. They cover the fund's history, asset allocation, and challenges of investing in emerging markets. Tangen also shares his hobbies, art collection, and reflections on his professional life.
The Norwegian Sovereign Wealth Fund, overseen by Nicolai Tangen, owns a significant portion of public equities worldwide and listed companies in Europe, making it a major player in the global market.
Transparency and openness are core values for the Norwegian Sovereign Wealth Fund, both internally and externally, aiming to increase trust and attract top talent.
Nicolai Tangen emphasizes the importance of traits like hard work, passion, and grit in successful leaders, as well as the value of long-term thinking and tackling challenges head-on.
Deep dives
The Norwegian Sovereign Wealth Fund: Managing $1.3 Trillion in Assets
Nikolai Tangen, CEO of the Norwegian Sovereign Wealth Fund, discusses the fund's size and influence in the global market. With $1.3 trillion in assets, the fund owns 1.5% of all public equities worldwide and 2.7% of all listed companies in Europe. Tangen emphasizes the fund's focus on responsible and sustainable investing, engaging with companies on ESG issues, and participating in voting at AGMs. He also highlights the fund's interest in expanding into private markets, such as private equity, to capture the value creation that occurs outside the listed market. Tangen believes in the importance of long-term thinking, hard work, passion, and grit in achieving success.
The Role of Transparency and Openness in the Norwegian Sovereign Wealth Fund
Tangen highlights the fund's commitment to transparency and openness, sharing information internally and externally. Internally, the fund publishes notes from leader group meetings and encourages open communication within the organization. Externally, the fund aims to be transparent with the public, showcasing its activities, publishing holdings, and engaging with stakeholders. Tangen believes that transparency increases trust and attracts better applicants. He sees the fund's role not only as a financial institution but also as a force for good in the Norwegian asset management industry.
Lessons from Successful CEOs and the Importance of Passion and Long-Term Thinking
Drawing from his podcast interviews with successful CEOs, Tangen highlights key traits they possess, including hard work, passion, and grit. He believes that passion for one's work gives individuals the drive to work hard and overcome challenges. Tangen emphasizes the importance of long-term thinking in investing and decision-making, contrasting short-term trading strategies with a more patient and focused approach. He also emphasizes the value of running towards problems and tackling challenges head-on as they arise.
The Journey and Governance of the Norwegian Sovereign Wealth Fund
Tangen traces the history of the Norwegian Sovereign Wealth Fund from its beginnings as a result of the country's oil discovery in 1969 to its current status as the largest sovereign wealth fund in the world with a $1.3 trillion value. He explains the governance structure, which involves political anchoring in the Norwegian parliament, delegation to the Minister of Finance, and oversight by the central bank. Tangen discusses the fund's asset allocation strategy, risk management, and engagement with external managers. He also touches upon the potential expansion into private equity and the impact of the fund's activities on the Norwegian asset management industry.
The Fund's Commitment to Sustainable Investing and Environmental Considerations
Tangen emphasizes the fund's commitment to investing in a responsible and sustainable manner. The fund has a dedicated ESG team and sets expectations for companies on issues such as corruption, climate change, and human rights. It also exercises its voting rights at AGMs and engages in company dialogues. Tangen acknowledges the importance of environmental considerations and the financial risks associated with climate change. He discusses the need to balance oil and gas revenues with long-term capital deployment for sustainable investments.
Nicolai Tangen is the CEO of Norges Bank Investment Management, where he oversees the $1.3 trillion Norwegian Sovereign Wealth Fund, the largest sovereign wealth fund in the world. The Fund owns 1.5% of all public equities worldwide and 2.7% of all listed companies in Europe. As part of his effort to communicate with constituents, Nicolai also hosts “In Good Company,” a podcast where he interviews CEOs of large, global, market-leading companies. Before taking the helm three years ago, Nicolai was the founder of AKO Capital, which today manages $20 billion and is one of Europe’s leading hedge funds.
Our conversation covers Nicolai’s investment path, lessons learned along the way about interviewing and leadership, and transition to the Norwegian Sovereign Wealth Fund. We discuss the history of the pool of assets, Nicolai’s approach to serving as a universal owner of assets, and his goals as leader of the organization.