Hedge Fund Boss Under Pressure to Divest for $1.2 Trillion Job
(Bloomberg) -- The hedge fund manager set to become chief executive of Norway’s $1.2 trillion wealth fund is facing fresh demands to address a number of conflicts of interest that lawmakers warn could derail his appointment.
Nicolai Tangen will meet with the leadership of the central bank in Oslo on Monday as they try to satisfy demands made by parliament before the founder of AKO Capital LLP can start running the world’s biggest sovereign fund.
The main point of contention is a decision by Norges Bank, which runs the fund, to let Tangen keep a controlling stake in his firm.
The CEO “cannot have assets or interests that create, or could appear to create, conflicts of interest that could weaken confidence in the reputation” of the fund, Norway’s parliamentary Finance Committee said on Friday. “These matters must be resolved before” the new CEO can start.
Finance Minister Jan Tore Sanner, speaking shortly after the committee laid out its terms, said he hopes a solution can still be found that allows Tangen to start as CEO on Sept. 1, as planned. He also said he couldn’t rule out that he may need to intervene.
It’s a “serious matter,” Sanner told reporters at a joint press conference with Norges Bank Governor Oystein Olsen. Sanner also called it “a matter that affects the reputation and the general confidence in Norges Bank.”
Norges Bank chose Tangen to be the next CEO of the wealth fund back in March. But its watchdog has since blasted its failure to address a number of conflicts of interest, ranging from Tangen’s personal wealth to his firm’s use of tax havens.
The botched handling of the recruitment has triggered a political storm, and even prompted speculation that Olsen might himself be forced to step down. On Friday, the Norges Bank governor said he has no plans to resign, despite the criticism he’s received.
Tangen has already agreed to cut his stake in AKO, the London-based hedge fund he founded, to 43%, and he’s putting his assets into a blind trust. The 54-year-old, whose personal fortune is estimated at about $915 million, has also made clear he’s not willing to divest entirely, if that becomes a condition for taking over the role of CEO at the wealth fund.
Olsen declined to say whether Monday’s meeting will focus on forcing Tangen to reduce his stake in AKO further. Tangen declined to comment, referring all questions to Norges Bank.
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